• Mon. Oct 25th, 2021

Supply chain disruptions are slowing global growth – Orange news


Oct 13, 2021

published on Tuesday, October 12, 2021 at 11:01 p.m.

Poor countries lagging behind in vaccination against Covid and disruptions in supply chains around the world are slowing global growth, the International Monetary Fund warned on Tuesday.

“The pandemic is not over nowhere until it is not over everywhere,” said Gita Gopinath, chief economist at a conference at the institution’s fall meetings.

The IMF now expects global GDP to rise 5.9% this year against 6% in July.

The downward revision is “marginal,” Gopinath said. “However, it masks major revisions for some countries” and “the outlook for low-income countries has darkened considerably,” she added.

Ms. Gopinath highlighted the desynchronization of global supply chains, resulting in blockages at ports, shortages for a range of products and materials, especially semiconductors, and rising export costs.

This weighs particularly in the United States where manufacturers are struggling to increase their production rate.

Combined with the rebound in demand, they also lead to higher energy prices, weighing on households, although Ms. Gopinath expects the situation to improve gradually from “the end of the first quarter”.

As a result, the IMF lowered the 2021 growth forecast for the United States to 6%, from 7% in July. But it revised it up for 2022, to 5.2%, taking into account the pharaonic spending projects planned by the Biden administration, of several trillions of dollars.

– Increasing forecasts for France –

China, where the pandemic started at the end of 2019, has also undergone a downward revision, albeit marginal (-0.1 point to 8%).

Conversely, the Fund sees stronger growth in 2021 in the euro zone (+0.4 point to 5%).

But here again, the disparities are large with an increase in its growth forecast for France which has accelerated the vaccination of its population (+0.5 point to 6.3%) and a downward revision for that of Germany. which also suffers from the shortage of semiconductors (-0.5 points to 3.1%).

For the Latin America and Caribbean region, which has been hard hit by the pandemic, forecasts are improving (+0.5 points to 6.3%) after a severe recession (-7% compared to -3.1% at worldwide) recorded in 2020.

For 2022, the IMF expects global growth unchanged at 4.9%.

All these forecasts, however, remain very uncertain, acknowledges Gita Gopinath, recalling that they are based in particular on a vaccination target of 40% of the world population by the end of this year and 70% by mid-year. 2022.

About 58% of the population of advanced economies has been fully vaccinated, against 36% in emerging economies and less than 5% in poor countries, said the Washington institution, which published its forecasts on the occasion of its meetings. ‘fall.

– “Dangerous divergence” –

“If the impact of Covid were to continue (…), global GDP could be reduced by a total of 5.3 trillion dollars over the next five years compared to our current forecasts,” explained Ms. Gopinath.

The biggest concern, she said, is the “dangerous divergence” in economic prospects between countries.

The GDP of advanced economies should indeed return to its pre-pandemic trajectory in 2022 and exceed it by 0.9% in 2024.

On the other hand, that of emerging markets and developing economies (excluding China) should remain 5.5% below pre-pandemic forecasts in 2024. This will result in “a significant decline in the improvement of the standard of living” of these populations. .

Ms Gopinath also lamented an “uneven” labor market recovery across economies and even within categories of workers, due to combined factors such as fear of being infected with Covid and the problem of childcare. .

In addition, “food prices have increased the most in low-income countries where food insecurity is most acute, increasing the burden on the poorest households and increasing the risk of social unrest,” she said.

The IMF nevertheless estimates that inflation will return to pre-pandemic levels by mid-2022, in both advanced and emerging economies.

For the institution, the absolute priority remains the control of the pandemic.