Coronavirus: IMF expects to scale back global growth forecast

Coronavirus: IMF expects to scale back global growth forecast
© Belga

The International Monetary Fund (IMF) expects it will need to downgrade its global growth projections due to the new Omicron variant of the Coronavirus now spreading throughout the world, Belga news agency reports.

“A new variant that may spread very rapidly can dent confidence, and in that sense, we are likely to see some downgrades of our October projections for global growth,” Belga reported IMF Managing Director Kristalina Georgieva as saying at the Reuters Next conference.

The IMF had already scaled down its projections for global economic growth to 5.9% this year – from 6% in July –, due to logistical problems and unequal vaccination rates. At the time, it had retained its 4.9% projection for 2022. Since then, the Fund has already warned that growth could be even less due to unresolved production-chain bottlenecks and the resulting inflatory trends worldwide.

Even before the arrival of the new variant, there had been fears that economic recovery, even if it continued, would lose momentum, Ms. Georgieva commented on Friday. She stressed that the growth of the world’s two largest economies, the United States and China, had already been constrained by the Delta variant, which spread throughout the world in late summer and autumn.

The IMF usually revises its October forecasts in January.

Omicron, a strongly mutated version of the Coronavirus, was first reported in South Africa on 24 November and is now present in dozens of other countries.

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