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IMF downgrades 2022 global economic growth outlook to 4.4%
Updated: 2022-01-26 17:01:31 KST
The International Monetary Fund has downgraded its projected global economic growth rate for 2022.
In its World Economic Outlook report released Tuesday, the IMF cut its forecast for global GDP for this year by half a percentage point from its previous projection in October, to 4.4 percent.
An IMF official said that, as the pandemic enters its third year, the global recovery faces multiple challenges.

"The Omicron variant has led to renewed mobility restrictions in many countries and increased labor shortages. Supply disruptions still weigh on activity and are contributing to higher inflation, adding to pressures from strong demand and elevated food and energy prices. Moreover, record debt and rising inflation constrain the ability of many countries to address renewed disruptions."

The revision is mostly due to sizeable, projected markdowns in the world's two largest economies, the United States and China.
The American economy is expected to grow four percent this year, a downward revision of 1.2 percentage points from the previous forecast.
The IMF official said it reflects lower prospects of legislating the Biden administration's Build Back Better fiscal package, the Fed's earlier than expected withdrawal of extraordinary monetary accommodation and supply bottlenecks.
China's outlook was lowered by point-8 percentage points to 4.8 percent.
The IMF said its calculation was based on the continued spread of financial stress in China's real estate sector and a weaker than expected recovery in private consumption.
Among major economies, South Korea's downgrade was relatively small, a cut of three tenths of a percentage point from the previous projection to 3-percent.

"South Korea is also experiencing high inflation and an economic slowdown like other countries, but the revision has been relatively smaller as large-scale fiscal support from the government is expected."

South Korea's Finance Ministry also said the country's solid current account balance and the government's latest supplementary budget likely had a positive effect on the IMF's moderate revision.
The IMF predicts South Korea's growth next year to stand at 2.9 percent, up point-one percentage points from the previous outlook.
Eum Ji-young, Arirang News.
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