World: economic recovery is running out of steam

The IMF slightly reduces its forecast for global GDP growth. Inflation and shortages weigh more than expected.

Having just confirmed the retention of Kristalina Georgieva, suspected of having favored China when she headed the World Bank , at its head , the International Monetary Fund was able to refocus on current affairs and unveil its new economic forecasts.

The institution reduced its prediction of global growth for 2021 by 0.1 percentage point , to 5.9%, and confirmed that for 2022, to 4.9%. "This modest revision masks sharp declines for some countries," explained Gita Gopinath, the IMF's chief economist.

Headwinds across the Atlantic

The United States recorded the strongest deterioration among the great powers: the American economy should grow by "only" 6% this year, against 7% expected last July. As in the rest of the world, the recovery across the Atlantic is being hampered by shortages of semiconductors and other materials, disruptions in supply chains, as well as by rising prices for energy and raw materials .

But the United States is also facing particularly high inflation : 5.3% in August (year-on-year), while net job creation slowed to 194,000 in September, against 366,000 in August.

Conversely, the horizon is clearer for the euro zone , despite the recent surge in gas and electricity prices. Its GDP is expected to grow by 5% this year (against 4.6% estimated in July) and by 4.3% next year (unchanged forecast).

The increase in expected growth in France , from 5.8% to 6.3%, and in Italy, from 4.9% to 5.8%, more than offsets the reduction from 3.6% to 3.1% of the expected increase in Germany .

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Paris and Rome are benefiting from the good performance of household consumption and their lower dependence on industry , in particular automotive . As for emerging countries , the IMF reduced its forecasts for China by 0.1 point in 2021 and 2022, to 8% and 5.6% respectively.

This could still prove to be too optimistic if the real estate market deteriorates sharply, as the recent defaults of developers Evergrande , Fantasia and Sinic have raised fears.

More generally, Gita Gopinath warns of the risks associated with the gap between high and low-income countries in the  fight against Covid-19 . About 58% of the population in advanced economies are fully immunized, compared to 36% in emerging countries ... and less than 5% in the poorest nations.

However, the IMF's chief economist warns that the pandemic will continue to weigh on the world economy (logistical disruptions, movement restrictions, etc.) as long as the entire planet is not better protected.

Rising price

The institution encourages governments and central banks not to reduce their fiscal and monetary support policies too quickly, arguing that current inflationary surges should subside next year.

It nonetheless raises its forecasts of consumer price increases to 2.8% in developed countries in 2021 (+0.4 points compared to July) and to 2.3% in 2022 (+0, 2). It expects 5.5% and 4.9% in emerging and developing countries (+0.1 and +0.2).

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