New York, Jan. 25 (BNA): The International Monetary Fund has lowered its forecast for the world economy this year, citing the spread of the COVID-19 Omicron variable, rising energy prices, rising inflation and deteriorating outlook for the world’s two largest economies – the United States and China.
The 190-nation lending agency now expects the global economy to expand by 4.4% in 2022. This is down from the 5.9% estimated last year and the 4.9% the International Monetary Fund projected for 2022 in October.
The International Monetary Fund cut its growth forecast for the United States – the world’s largest economy – to 4% from the 5.2% it forecast in October.
The agency no longer expects any economic stimulus from President Joe Biden’s Rebuilding Better Social Policy bill, which has stalled in Congress.
The US economy is also grappling with supply chain bottlenecks preventing businesses from meeting customer demands, and with the Federal Reserve’s impending move to raise interest rates to cool the most severe inflation of the year in four decades.
China’s economy is expected to grow 4.8% this year — down from 8.1% last year and 0.8 percentage points slower than the International Monetary Fund forecast in October.
According to the agency, China’s zero-tolerance approach to the coronavirus is likely to lead to economic losses such as financial pressure on the country’s property developers.
The International Monetary Fund expects the 19 European countries that share the euro currency collectively to grow by 3.9% this year, down from 5.2% in 2021. Japan is expected to record 3.3% growth this year, up from 1.6% last year, as a result of continuing . Government support for the economy.
The International Monetary Fund expects inflation to accelerate this year and fade in 2023. It sees consumer prices rising by 3.9% in advanced economies, the highest level since 1991 and up sharply from the 2.3% that the International Monetary Fund projected in October.
It forecasts inflation of 5.9% this year and developing and emerging economies, the highest since 2011 and up from 4.9% in October.
The International Monetary Fund expects inflation to slow next year to 2.1% in advanced economies and 4.7% in developing markets.
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