The latest World Economic Outlook, updating forecasts from July
- 2021 GDP seen at 5.9% from 6.0% in July
- 2022 GDP remains at 4.9%
- Cuts US forecast by 1 percentage point this year to 6.0% from 7.0%
- China 2021 GDP cut to 8.0% from 8.1%
- Spain and Germany cut 0.5 pp each
- Canada lowered by 0.6 pp
- Italy +0.9 pp
- France +0.5 pp
- Eurozone +0.4 pp
- Risks tilted to the downside including emergence of new variants and more persistent supply-demand mismatches
The IMF highlighted there could be a downgrade recently so this isn't a surprise.
"This modest headline revision masks large downgrades for some countries," Gita Gopinath, chief economist at the IMF, said in an accompanying blogpost.
"The outlook for the low-income developing country group has darkened considerably due to worsening pandemic dynamics. The downgrade also reflects more difficult near-term prospects for the advanced economy group, in part due to supply disruptions."
The IMF chief economist said central banks should be prepared to move quickly on a material rise in inflation expectations.
"Inflation risks are skewed to the upside and could materialize if pandemic-induced supply-demand mismatches continue longer than expected," the report warned.
