IMF Lowers 2021 Global Growth Forecast, Signals Inflation Uncertainty

Headline Roundup October 12th, 2021

The International Monetary Fund on Tuesday signaled slowing economic momentum and rising uncertainty, lowering its 2021 global GDP growth forecast to 5.9% from its July projection of 6.0%. The 2022 growth projection remained at 4.9%, and the new projection is still significantly higher than 2020’s -3.1% decline. The IMF explained the new number by pointing to supply chain disruptions in advanced economies and pandemic dynamics in low-income developing countries. IMF Chief Economist Gita Gopinath also warned that central banks like the U.S. Federal Reserve should “chart contingent actions, announce clear triggers, and act in line with that communication” to mitigate the “risks of rising inflation expectations.”

Coverage was found primarily in business-focused outlets on Tuesday. Coverage in right-rated outlets was somewhat more likely to highlight inflation concerns, with some center-rated outlets covering IMF statements on inflation and GDP growth separately. 

From the Center

The International Monetary Fund is now less optimistic about the global economy for 2021, but still sees reasonable growth over the medium term. 

In its World Economic Outlook, published Tuesday, the Fund said it expects global gross domestic product to grow by 5.9% this year — 0.1 percentage point lower than its July estimate. For next year, the IMF has kept its global growth projection at 4.9%.

The revised outlook for this year comes amid supply chain issues in advanced economies and a worsening health situation in emerging countries.

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From the Left

The global economic recovery from the coronavirus pandemic is weakening and risks are rising, according to the International Monetary Fund.

The IMF on Tuesday slashed its 2021 growth forecast for the United States by one full percentage point to 6%, the biggest reduction suffered by any G7 economy in its latest World Economic Outlook.

The cut reflects disruptions to supply chains and softening consumption in the third quarter, the IMF said.

The revision comes days after Goldman Sachs cut its growth forecasts for the US economy this year and next, citing weaker consumer spending and the...

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From the Right

Surging inflation and supply chain disruptions are hampering the global economic recovery from the coronavirus pandemic, the International Monetary Fund warned on Tuesday.

The Washington-based IMF projected in its latest World Economic Outlook that global domestic gross product will grow by 5.9% this – 0.1 percentage point lower than its July estimate. The IMF expects global growth to remain at 4.9% next year.

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