The International Monetary Fund said on Tuesday that continued supply chain disruptions and inflationary pressures will limit the global recovery from the COVID-19 pandemic, as it lowers growth forecasts for the United States and other major industrialized nations.
In its forecasts for the global economy, the International Monetary Fund cut its forecast for global economic growth for 2021 to 5.9 percent from 6.0 percent in July. The global economic growth forecast for 2022 remains unchanged at 4.9 percent.
“This modest headline adjustment masks significant downgrades for some countries,” the IMF said in a report, adding that the deteriorating dynamics of the pandemic worsened the outlook for low-income developing countries, while rich countries struggled with supply disruptions.
The International Monetary Fund said high inflation is expected to decline in 2022 to levels witnessed before advent of COVID19. However, IMF chief economist Gita Gopinath noted that the global lender is increasingly worried about persistent inflation, saying, “Central banks need to be prepared. Move quickly if the risks of rising inflationary expectations are highlighted in this uncertain recovery. “