The International Monetary Fund (IMF) has slashed its growth prediction for 2022, citing higher-than-expected inflation and the Omicron variation as reasons for the downgrade.
In a quarterly update on predictions released in October 2021, the IMF predicted that growth would be 4.4 percent this year, down 0.5 percentage points from last year, with the possibility of a worse performance.
The downgrading was blamed on mounting cost pressures and the rapid spread of Omicron, according to the Washington-based organisation, which added that while the forecast for the world’s two largest economies – the US and China—was considerably worse in 2022, few countries would be spared a downturn.
The UK is predicted to increase by 4.7 per cent in 2022, down 0.3 percentage points from the IMF’s October 2021 World Economic Outlook prediction.
Despite the cut, the IMF predicts that the UK will expand faster this year than the other six G7 industrial nations — the United States, Japan, Germany, France, Italy, and Canada.
The United States, the world’s largest economy, saw its estimate slashed due to concerns over President Joe Biden’s spending agenda, while China, the world’s second-largest economy, faced real estate issues.
According to the IMF, the global economy grew 5.9% last year, the greatest in four decades of detailed statistics.
This followed a 3.1 percent drop in 2020, the largest drop in broader data since the Great Depression.
(With inputs from agencies)