IMF: global growth is showing signs of slowing down – Les Échos

Global economic growth is showing signs of weakness. And clouds are gathering on the horizon. By publishing its new forecasts on Tuesday, the International Monetary Fund (IMF) revised down slightly his forecasts for the month of July .

For the current year, global gross domestic product (GDP) growth is expected to stand at 5.9%. It is a tenth of a point less compared to July. The 2022 forecast is unchanged at 4.9%. “This modest revision masks sharp declines for some countries,” detailed Gita Gopinath, the Fund’s chief economist.

France and Italy on the rise

Growth in industrialized countries will only be 5.2% and not 5.6%. The performance of the United States is cut by a percentage point to 6%, that of Germany by half a point (3.1%). Conversely, the Fund raised its forecast by almost one point for Italy (5.8%) and half a point for France (6.3%).

Emerging and developing countries are resisting with expected growth of 6.4%. But, here again, the fund notes disparities. “The outlook for low-income developing countries has darkened considerably due to the worsening pandemic dynamics,” Gita Gopinath emphasizes.

Access to the vaccines in question

These economic differences result from inequity in access to vaccines . “While nearly 60% of the population of advanced economies are fully vaccinated and some now receive boosters, about 96% of the population of low-income countries are still not,” says the chief economist. “Accelerating the vaccination of the world’s population remains the top political priority, while continuing to press for widespread testing and investment in therapeutics,” warns the Fund.

Ultimately, production in advanced economies should return to its pre-pandemic trend in 2022 and exceed it by 0.9% in 2024. On the other hand, for emerging markets and developing economies (excluding China) , it is expected to remain 5.5% lower than pre-pandemic forecasts in 2024, thereby leading to a greater decline in living standards.

Concern over inflation

The IMF is also concerned about supply disruptions in value chains and resulting inflationary pressures . Rising food prices are not helping the situation. In most countries, “price pressures should ease in 2022 once the imbalances between supply and demand have been resolved,” predicts the IMF.

Before warning that, “in some emerging markets and developing economies, price pressures are expected to persist due to high food prices, lagged effects of higher oil prices and the depreciation of the exchange rate. pushing up the prices of imported products ”. On average, the IMF is revising its inflation forecasts in industrialized countries upwards to 2.8%. For emerging and developing countries, the increase would reach 5.5%.

The right balance to be found

However, warns the multilateral institution, “great uncertainty surrounds the outlook for inflation, mainly due to the evolution of the pandemic and the duration of the supply disruptions”.

Central banks will have to find the right balance between fighting inflation and supporting economic recovery.

Gita Gopinath Chief Economist of the IMF

New waves of the Covid-19 epidemic with the prospect of new movement restrictions to slow transmission of the virus could result in more persistent supply disruptions.

In this context, central banks will have to find “a fair balance between the fight against inflation and […] support for economic recovery, ”notes Gita Gopinath. The concern mainly concerns the United States , the United Kingdom and some developing countries. In a context where inflation is rising while the employment rate is still low, “monetary policy may need to be tightened to stay ahead of price pressures, even if this delays the recovery in employment,” said the IMF.