The IMF is out with new growth updates
- Cuts US 2022 growth by 1.2% to 4% from 5.2% previous. Growth was 5.6% in 2021
- Sees US growth of 2.6% in 2023
- IMF reduction in US reflects new assumptions minus Build Back Better legislation, earlier withdrawal of monetary accomodation and continued supply chain shortages
- Revises UK GDP to 4.7% in 2022 (versus5.0%) and 2.3% in 2023 (versus 1.9%)
- Cuts Euro area growth to 3.9% in 2022 (down -0.4%) and 2.5% in 2023
- Inflation should gradually decrease as supply-demand imbalances wane in 2022 and monetary policy responds
- Elevated inflation expected to persist longer than expected given ongoing supply chain disruptions, high energy prices, averaging 3.9% in advanced economies in 2022
- Sees China economy growing by 4.8% in 2022 vs earlier forecast of 5.6%. Sees 2023 growth at 5.2%
- Sees Japan growth in 2022 at 3.3% and that easing to 1.8% in 2023.
- Cuts forecast for global growth by 0.5% to 4.4% in 2022, after 5.9% in 2021. Cites omicron variant, continued supply disruptions, higher than expected inflation.
- Risks to global outlook tilted to the downside given uncertainty about pandemic, supply disruptions, pace of US monetary tightening, inflation and China real estate slowdown
