- IMF predicts global economy to grow 6% in 2021 and 4.9% in 2022
Market news
27 July 2021
IMF predicts global economy to grow 6% in 2021 and 4.9% in 2022
- IMF's 2021 global growth forecast is unchanged from April
- A 0.5 ppt upgrade for 2022 projection was largely due to forecast upgrade for advanced economies
- U.S. 2021 growth forecast was revised to 7.0% from 6.4% in April and 2022 growth forecast was revised at 4.9% from 3.5% seen previously
- Eurozone 2021 growth forecast was revised to 4.6% from 4.4% in April and 2022 growth forecast was revised at 4.3% from 3.8% previously
- China's 2021 growth forecast was revised to 8.1% from 8.4% in April and 2022 growth forecast was revised to 5.7% from 5.6% previously
- UK 2021 growth forecast was revised to 7.0% from 5.3% in April and 2022 growth forecast was revised to 4.8% from 5.1% previously
- Recent price pressures for most part reflect unusual pandemic-related developments and transitory supply-demand mismatches
- Inflation is expected to return to its pre-pandemic ranges in most countries in 2022 once these disturbances work their way through prices
- Central banks should generally look through transitory inflation pressures and avoid tightening until there is more clarity on underlying price dynamics
- Risks around the global baseline are to the downside
- Slower-than-anticipated vaccine rollout would allow the virus to mutate further
- Financial conditions could tighten rapidly, for instance from reassessment of monetary policy outlook in advanced economies if inflation expectations increase more rapidly than forecast
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