The International Monetary Fund has downgraded its forecast for global economic growth in 2022.

According to the organization's estimate, the volume of global GDP will increase by 4.4% against the previously expected 4.9%.

This is stated in the IMF World Economic Outlook report published on Tuesday, January 25.

Global economic growth is slowing as countries continue to face supply disruptions, high inflation and record levels of debt, Gita Gopinath, the fund's first deputy managing director, said.

“The ongoing global economic recovery is facing multiple challenges as the pandemic enters its third year.

The rapid spread of the omicron strain has prompted renewed travel restrictions in many countries and increased labor shortages.

Supply disruptions continue to constrain activity and contribute to higher inflation,” the IMF deputy head said.

According to her, the prospects for global growth remain limited due to the complication of the situation in the economies of the United States and China.

Thus, the forecast for GDP growth in the United States in 2022 was lowered from 5.2% to 4%, and China - from 5.6% to 4.8%.

As Gita Gopinat explained, the United States continues to have problems with the approval of the Build Back Better project to restore the country's infrastructure and social sphere.

In addition, the premature curtailment of stimulus programs by the US regulator has a negative impact.

In China, however, there is a decline in real estate and a weaker-than-expected recovery in consumer activity.

Some challenges for the global economy this year may be short-term, IMF experts do not exclude.

For example, the organization expects the Omicron strain to put pressure on global activity only in the first quarter, after which the negative impact will weaken.

At the same time, as the authors of the report emphasize, the situation in the world is still uncertain, and the pandemic still poses a threat.

“The emergence of strains of the virus leading to higher mortality could prolong the crisis.

China's zero-tolerance strategy for COVID could exacerbate global supply disruptions, and if financial strains in the country's real estate sector spread to wider segments of the economy, there would be far-reaching repercussions.

Higher-than-expected inflation rates in the US could trigger active Fed tightening and severely tighten global financial conditions,” said Gita Gopinath.

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Recall that back in 2020, against the backdrop of the COVID-19 pandemic, the US Federal Reserve announced an unprecedented expansion of the quantitative easing program.

The Fed lowered the interest rate to near zero and began printing dollars, pumping money into the country's financial system to quickly restore the economy.

The European Central Bank, as well as other regulators of developed countries, began to pursue a similar policy.

The actions of the monetary authorities have become one of the main reasons for the acceleration of inflation in the world.

Against this backdrop, to combat rising prices, the US Federal Reserve has already announced the beginning of the curtailment of the quantitative easing program.

According to experts, other regulators will begin to take similar steps in 2022.

However, the tightening of monetary conditions creates new risks for the global economy, experts believe.

“Central banks in various countries, including the US, will be forced to raise interest rates to dampen rising inflation.

Those states that took loans in dollars will have difficulty repaying their debts.

As a result, the risk of default for countries that will not be able to service debts at increased interest rates is seriously increasing, ”said Nikita Maslennikov, head of the Finance and Economics department at the Institute of Contemporary Development, in an interview with RT.

A similar point of view is shared by Alexander Abramov, Head of the Laboratory for the Analysis of Institutions and Financial Markets at the Institute for Applied Economic Research of the RANEPA.

According to him, rising interest rates will slow down the global economy.

At the same time, inflation may still remain high due to higher energy and food prices.

It is noteworthy that under these conditions, the IMF has improved its forecast for global economic growth in 2023 from 3.6% to 3.8%.

According to Abramov, such a reassessment may be associated with the expected improvement in the epidemic situation in the world.

“The fund’s experts expect that in 2022 it will be possible to achieve positive results in the fight against coronavirus, and there will be signs of the pandemic passing.

Thus, already in 2023, the world will be more free from any restrictions, and it will be possible to observe additional growth rates.

However, so far such a forecast is very conditional, ”Abramov emphasized.

On the same wave

Experts from the International Monetary Fund revised their forecast for the Russian economy for the next two years.

The estimate of GDP growth for 2022 was lowered from 2.9% to 2.8%, and for 2023, on the contrary, it was increased from 2% to 2.1%.

“In general, the Russian economy has already recovered to the level of its potential output.

If we talk about what needs to be improved for higher economic growth, then there are three factors.

It is necessary to reduce inflation to at least 5%, achieve growth in investments, including foreign ones, and ensure high labor productivity,” Nikita Maslennikov believes.

In his opinion, high prices for energy resources can have a positive impact on the economy and budget of the country this year.

Thus, according to the IMF forecast, in 2022 the cost of oil in the world may increase by 12%, and natural gas - by 58%.

In part, the situation in the economy will also depend on geopolitical factors, Maslennikov believes.

Thus, the possible introduction of a new package of sanctions may have a negative impact on the country's financial market.

However, the effect of potential restrictions will be temporary, the specialist is sure.

“The economy has already adapted in many ways.

At the beginning of the sanctions conflicts, we received less than 4-4.5% of GDP per year, but now the sanctions are not of such a critical nature.

Yes, the current story with Ukraine affects the markets and the behavior of investors, but the authorities already know how to work with this.

The Central Bank can support the national currency, and if risks increase, the economy will be supported by high oil prices, a normal trade balance, a budget surplus, a large amount of reserves and low public debt, ”concluded the economist.