The International Monetary Fund has downgraded its global economic outlook for the year, dragged by ongoing concerns regarding global supply constraints, CNBC reported.

  • In its latest World Economic Outlook, the IMF said it now expects the global economy to expand by 5.9%, down 0.1 percentage points from its 6.0% prediction in July. It kept its 2022 estimate at 4.9%.
  • IMF Chief Economist Gita Gopinath said the modest downgrade masks significant downgrades for some countries, as the outlook for low-income developing countries have “darkened considerably.”
  • Gopinath said the downward revision also indicates more downside risks in the near term for advanced economies as supply disruptions continue to hit global production.
  • The IMF also cut growth estimates for the United States by one percentage point to 6%, Spain and Germany by 0.5 percentage points each, and Canada by 0.6 percentage points. 

The IMF also warned that central banks should be ready to move fast if economic recovery strengthens faster than expected or inflationary uptick risks become tangible.