The International Monetary Fund (IMF) has decreased its global growth forecast for 2022 because of rising COVID-19 cases due to the Omicron variant, as well as supply chain issues and high inflation due to the pandemic. The IMF now expects global GDP to decrease from 5.5% in 2021 to 4.4% in 2022, a .5% decrease from their previous estimate.
This revision is also because of slowdowns in the two biggest economies in the world: the United States and China. The United States is now only estimated to grow around 4% this year, which is 1.2% less than previously estimated, and China is only expected to grow 4.8% this year, which is .8% less than estimated before.
But, the IMF does currently predict that the economy will improve throughout the year and into 2023, and is now estimating that the global economy will grow 3.8% in 2023, .2% higher than their last estimate. This is dependent however on vaccination rates improving around the world, and better health care for people who fall ill with COVID-19. If these things don’t happen, the growth outlook for 2023 may also fall in the future.
https://www.cnbc.com/2022/01/25/imf-cuts-global-growth-outlook-for-2022-us-and-china-recovery-wanes.html
The Omnicron variant is likely a leading contributor for this newly predicted decrease. The high transmission rate of the Omnicron variant is lowering the accessibility of labor across the globe, and it will continue to do so until people either become immune or we find a way to cure it.
ReplyDeleteIt is interesting to note that in addition to Omicron affecting the global GDP, decreasing it by a little over a percent, it has also damaged the growth rate of two of the world's largest economies, that being China and the United States. Additionally, is is notable that the growth rate might continue to be harmed in the future if vaccination rates don't increase around the world.
ReplyDeleteObviously the Omicron variant plays a part in this, but I wonder what other factors have caused this decrease in their projections. It's possible that they thought that some of the supply chain issues may be resolved by now that have not been. I think as some of the supply chain issues are solved, hopefully sooner rather than later, there will be a more optimistic outlook by IMF.
ReplyDeleteThe things is that IMF "predicts" all of these economical factors. Forecasting depends on many independent factors. Hopefully, we will see the end of pandemic soon or later. However, there is no guarantee that we will not face a new covid-19 variant
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