IMF fractionally downgrades 2021 GDP, leaves 2022 unchanged

The latest World Economic Outlook, updating forecasts from July 2021 GDP seen at 5.9% from 6.0% in July 2022 GDP remains at 4.9% Cuts US forecast by 1 percentage point this year to 6.0% from 7.0% China 2021 GDP cut to 8.0% from 8.1% Spain and Germany cut 0.5 pp each Canada lowered by 0.6 pp Italy +0.9 pp France +0.5 pp Eurozone +0.4 pp Risks tilted to the downside including emergence of new variants and more persistent supply-demand mismatches The IMF highlighted there could be a downgrade recently so this isn't a surprise. "This modest headline revision masks large downgrades for some countries," Gita Gopinath, chief economist at the IMF, said in an accompanying blogpost. "The outlook for the low-income developing country group has darkened considerably due to worsening pandemic dynamics. The downgrade also reflects more difficult near-term prospects for the advanced economy group, in part due to supply disruptions." The IMF chief economist said central banks should be prepared to move quickly on a material rise in inflation expectations. "Inflation risks are skewed to the upside and could materialize if pandemic-induced supply-demand mismatches continue longer than expected," the report warned. Invest in yourself. See our forex education hub.

IMF fractionally downgrades 2021 GDP, leaves 2022  unchanged

The latest World Economic Outlook, updating forecasts from July

The latest World Economic Outlook, updating forecasts from July
  • 2021 GDP seen at 5.9% from 6.0% in July
  • 2022 GDP remains at 4.9%
  • Cuts US forecast by 1 percentage point this year to 6.0% from 7.0%
  • China 2021 GDP cut to 8.0% from 8.1%
  • Spain and Germany cut 0.5 pp each
  • Canada lowered by 0.6 pp
  • Italy +0.9 pp
  • France +0.5 pp
  • Eurozone +0.4 pp
  • Risks tilted to the downside including emergence of new variants and more persistent supply-demand mismatches

The IMF highlighted there could be a downgrade recently so this isn't a surprise.

"This modest headline revision masks large downgrades for some countries," Gita Gopinath, chief economist at the IMF, said in an accompanying blogpost.

"The outlook for the low-income developing country group has darkened considerably due to worsening pandemic dynamics. The downgrade also reflects more difficult near-term prospects for the advanced economy group, in part due to supply disruptions."


The IMF chief economist said central banks should be prepared to move quickly on a material rise in inflation expectations.

"Inflation risks are skewed to the upside and could materialize if pandemic-induced supply-demand mismatches continue longer than expected," the report warned.
IMF forecasts
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