IMF downgrades forecast for global GDP growth in 2022 to 4.4%

WASHINGTON, January 25. /TASS/. The International Monetary Fund (IMF) downgraded its forecast for global GDP growth this year by 0.5 percentage points (pp) compared to its October estimates, according to the January report of the IMF published on Tuesday.

According to the fund's analysts, this year the global GDP growth rate will be 4.4%, in the October forecast this figure was 4.9%. In 2023, the IMF expects growth of 3.8%. Last year, according to the estimates of the fund's analysts, the world economy grew by 5.9% (the figure remained unchanged compared to the October forecast).

The coronavirus variant, as well as rising energy prices and supply disruptions, led to higher and broader inflation than expected, especially in the US, as well as in many emerging markets and emerging economies, the report said, adding that the ongoing downturn in China's real estate sector and a slower-than-expected recovery in private consumption are also limiting growth prospects.

The IMF added that the deterioration in the forecast for global GDP growth mainly reflects the projected declining growth in the two largest economies – the United States and China. In addition, the authors of the report noted that rather high inflation will persist longer than expected due to disruptions in supply chains and high energy prices.

Meanwhile, new coronavirus variants could cause new economic shocks, the fund continued. The IMF noted the possibility of global risks as geopolitical tensions remain high and the ongoing climate emergency means that the likelihood of major natural disasters remains elevated.

The IMF also noted that the average oil price in 2022 is expected to increase by 11.9% compared to 2021 to $77.31 per barrel. At the same time, next year, oil prices will decrease by 7.8% to $71.29 per barrel, the report said. Futures markets indicate that oil prices will rise by about 12% in 2022 and natural gas by 58% (both significantly lower than in 2021), and will decrease in 2023 as the supply-demand imbalance is further will decrease more, the analysts said.

Meanwhile, the outlook for Russia’s GDP growth in 2023 was revised from 2% to 2.1%, the IMF said. At the same time, IMF lowered the forecast for Russian GDP growth this year from 2.9% to 2.8%. The Russian economy showed growth of 4.5% last year, which is lower than October forecasts, the report says. IMF improved the figure last fall from 4.4% expected in July 2021 to 4.7% for 2021.