World Economic Outlook Update, January 2022 - International ...

Global growth is expected to moderate from 5.9 in 2021 to 4.4 percent in 2022—half a percentage point lower for 2022 than in the October ... 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LoginorRegister Informationofinterest Videos AbouttheIMF Conferences Pressbriefings Speeches SpecialFeatures Africa Americas Asia Europe MiddleEastandCentralAsia EconomicOutlook Annualandspringmeetings CapacityDevelopment MostRecent MostPopular Data IMFFinances AdditionalDataSources WorldEconomicOutlookDatabases Database IMFeLibrary-Data InternationalFinancialStatistics G20DataGapsInitiative CurrencyCompositionofOfficialForeignExchangeReserves FinancialAccessSurvey Publications IMFeLibrary IMFBookstore IMFAnnualReport Finance&Development WorldEconomicOutlook GlobalFinancialStabilityReport FiscalMonitor ExternalSectorReport RegionalEconomicReports PolicyPapers StaffDiscussionNotes DepartmentalPapers AllStaffNotesSeries GlobalFinancialStabilityNotes SpilloverNotes How-ToNotes Advancedsearch COVID-19 PandemicPlan FinancialAssistance SpecialSeries COVID-19GlobalTargetsandProgressTracker IMF-WHOCOVID-19VaccineSupplyTracker IMF-WHOSubnationalCOVID-19VaccinationDashboard IMF-WHOCOVID-19VaccineSupplyForecastDashboard WorldEconomicOutlook Update RisingCaseloads, ADisruptedRecovery,andHigherInflation JANUARY2022 Overview ProjectionsTable DataTools Videos English العربية español français 日本語 русский 中文 DownloadFullReport RisingCaseloads,ADisruptedRecovery,andHigherInflation Theglobaleconomyenters2022inaweakerpositionthanpreviouslyexpected.AsthenewOmicronCOVID-19variantspreads,countrieshavereimposedmobilityrestrictions.Risingenergypricesandsupplydisruptionshaveresultedinhigherandmorebroad-basedinflationthananticipated,notablyintheUnitedStatesandmanyemergingmarketanddevelopingeconomies.TheongoingretrenchmentofChina’srealestatesectorandslower-than-expectedrecoveryofprivateconsumptionalsohavelimitedgrowthprospects.   Globalgrowthisexpectedtomoderatefrom5.9in2021to4.4percentin2022—halfapercentagepointlowerfor2022thanintheOctoberWorldEconomicOutlook(WEO),largelyreflectingforecastmarkdownsinthetwolargesteconomies.ArevisedassumptionremovingtheBuildBackBetterfiscalpolicypackagefromthebaseline,earlierwithdrawalofmonetaryaccommodation,andcontinuedsupplyshortagesproducedadownward1.2percentage-pointsrevisionfortheUnitedStates.InChina,pandemic-induceddisruptionsrelatedtothezero-toleranceCOVID-19policyandprotractedfinancialstressamongpropertydevelopershaveinduceda0.8percentage-pointdowngrade.Globalgrowthisexpectedtoslowto3.8percentin2023.Althoughthisis0.2percentagepointhigherthaninthepreviousforecast,theupgradelargelyreflectsamechanicalpickupaftercurrentdragsongrowthdissipateinthesecondhalfof2022.Theforecastisconditionalonadversehealthoutcomesdecliningtolowlevelsinmostcountriesbyend-2022,assumingvaccinationratesimproveworldwideandtherapiesbecomemoreeffective.   ElevatedinflationisexpectedtopersistforlongerthanenvisionedintheOctoberWEO,withongoingsupplychaindisruptionsandhighenergypricescontinuingin2022.Assuminginflationexpectationsstaywellanchored,inflationshouldgraduallydecreaseassupply-demandimbalanceswanein2022andmonetarypolicyinmajoreconomiesresponds.   Riskstotheglobalbaselinearetiltedtothedownside.TheemergenceofnewCOVID-19variantscouldprolongthepandemicandinducerenewedeconomicdisruptions.Moreover,supplychaindisruptions,energypricevolatility,andlocalizedwagepressuresmeanuncertaintyaroundinflationandpolicypathsishigh.Asadvancedeconomiesliftpolicyrates,riskstofinancialstabilityandemergingmarketanddevelopingeconomies’capitalflows,currencies,andfiscalpositions—especiallywithdebtlevelshavingincreasedsignificantlyinthepasttwoyears—mayemerge.Otherglobalrisksmaycrystallizeasgeopoliticaltensionsremainhigh,andtheongoingclimateemergencymeansthattheprobabilityofmajornaturaldisastersremainselevated.   Withthepandemiccontinuingtomaintainitsgrip,theemphasisonaneffectiveglobalhealthstrategyismoresalientthanever.Worldwideaccesstovaccines,tests,andtreatmentsisessentialtoreducetheriskoffurtherdangerousCOVID-19variants.Thisrequiresincreasedproductionofsupplies,aswellasbetterin-countrydeliverysystemsandfairerinternationaldistribution.Monetarypolicyinmanycountrieswillneedtocontinueonatighteningpathtocurbinflationpressures,whilefiscalpolicy—operatingwithmorelimitedspacethanearlierinthepandemic—willneedtoprioritizehealthandsocialspendingwhilefocusingsupportontheworstaffected.Inthiscontext,internationalcooperationwillbeessentialtopreserveaccesstoliquidityandexpediteorderlydebtrestructuringswhereneeded.Investinginclimatepoliciesremainsimperativetoreducetheriskofcatastrophicclimatechange. 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