In the report, the IMF reduced its forecast for global growth in 2021 to 5.9% from 6% in its forecast in July, and left its forecast for 2022 unchanged at 4.9%.
Container port in Hamburg, Germany on November 14, 2019. Photo: Reuters/VNA.
At the autumn meeting of the International Monetary Fund (IMF) and the World Bank (WB) on October 12, the IMF released the World Economic Outlook (WEO) report stating that the breaks in supply chains The response and price pressure are restraining the recovery of the world economy after the Covid-19 pandemic.
In the above report, the IMF reduced its global growth forecast for 2021 to 5.9% from 6% in July forecast, and kept its forecast for 2022 at 4.9%.
The IMF statement said that although the overall reduction forecast was only 0.1%, for some specific countries, the growth forecast decreased more sharply.
In particular, the current impact of the Covid-19 pandemic and the failure to distribute vaccines around the world are increasing economic disparities and causing a bleak outlook in developing countries. develop
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Global manufacturing activity has stalled because of supply chain problems, shortages of critical components such as semiconductors, port closures, lack of trucks, and labor shortages. because of blockade measures to fight the epidemic.
The supply-demand imbalance caused prices to rise and pushed up inflation. The IMF forecasts inflation will return to pre-epidemic levels by 2022, but warned that a prolonged supply disruption could alter inflation forecasts.
In the WEO, the US economic growth forecast was revised down the most, from 7% to 6% in 2021.
The IMF believes that US growth is likely to fall further, as this forecast assumes that the US Congress will approve President Joe Biden's $4 trillion infrastructure and social spending proposal.
US lawmakers are currently trying to agree on a smaller spending package, but the IMF said a reduction in that number would lead to a reduction in growth forecasts for both the US and its trading partners.
The report also cut growth in many other industrialized economies. German growth fell half a percentage point to 3.1% while Japan's growth fell 0.4 points to 2.4%.
The IMF forecasts that growth in the UK this year will decrease by 0.2 points to 6.8%, and this is the fastest growth forecast in the Group of advanced industrial economies (G7).
Workers work at a textile factory in Nantong, Jiangsu province, China on September 14. Photo: JIO/VNA.
China's 2021 growth is forecast to drop 0.1 point to 8%, according to the IMF, thanks to a faster-than-expected recovery in public investment.
The forecast for India is unchanged, now at 9.5%. Growth of the "ASEAN-5" group (including Indonesia, Malaysia, the Philippines, Thailand and Singapore) is expected to be around 2.9%, up from the 3.4% decline recorded in 2020 but down. 1.4 points compared to the forecast in July. In 2022, this region is forecasted to achieve 5.8% growth.
Particularly in some commodity exporting countries such as Nigeria and Saudi Arabia, the IMF slightly increased its growth forecast thanks to higher oil and commodity prices.
The IMF also warned of a dangerous disparity in the economic outlook due to a "massive vaccine imbalance", with 96% of the population in low-income countries still unvaccinated, leading to lower growth in the global economy. In the long run, poverty increases and the risk of inflation skyrockets.
The report states: "There will be about 65-75 million more people falling into extreme poverty in 2021, compared with pre-epidemic projections."
The IMF also said that low-income countries need an additional 250 billion USD to fight the epidemic and regain economic growth before the outbreak.
Source: NDH
