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10/12/2021, 3:00 PM (Source: TeleTrader)
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IMF lowers global growth projection for 2021 to 5.9%

The International Monetary Fund (IMF) lowered on Tuesday its global growth projection for 2021 slightly to 5.9% from 6%, leaving the 2022 growth expectations unchanged at 4.9%. In its World Economic Outlook, the IMF warned that "monetary policy will need to walk a fine line between tackling inflation and financial risks and supporting the economic recovery." The United States 2021 growth was cut down one percentage point to 6%, Canada's economy is expected to expand 5.7% or 0.6 percentage points less than in the July report, while Germany saw its growth lowered by 0.5 percentage points to 3.1%.

Headline inflation is expected to peak in the final months of 2021 and return to pre-pandemic levels by mid-2022 for most economies. However, "given the recovery’s uncharted nature, considerable uncertainty remains, and inflation could exceed forecasts for a variety of reasons."

IMF's Chief Economist Gita Gopinath stated one of the major risks to global economic recovery remains the emergence of new COVID-19 variants. Other factors include the pace of vaccination, supply disruptions, and climate change.

Baha Breaking the News (BBN) / DJ