The International Monetary Fund (IMF) on Tuesday said the global economic recovery is continuing, but the momentum has weakened due to the resurgence of the COVID-19 pandemic triggered by the Delta variant.
In its latest World Economic Outlook report, the fund revised its headline forecast for global growth this year down slightly by 0.1 of a percentage point to 5.9 per cent while leaving its projections for 2022 unchanged at 4.9 per cent.
The IMF cited supply disruptions as the principal reason for the downward revision of developed economies and the worsening pandemic dynamics in low-income developing economies.
“This modest headline revision, however, masks large downgrades for some countries,” said the IMF, noting that “the outlook for the low-income developing country group has darkened considerably due to worsening pandemic dynamics”.
Meanwhile, in the US, consumer prices increased solidly in September as Americans paid more for food, rent and a range of other goods.
The consumer price index rose by 0.4 per cent in September after increasing by 0.3 per cent the month before, the US Labour Department said on Wednesday.
During the past 12 months, the prices consumers paid for goods and services in the world’s largest economy increased by 5.4 per cent in September.
That rate matched June and July and brings the annualised rate of inflation back to its highest level since 2008. Excluding food and energy prices, the so-called core consumer prices edged up by 0.2 per cent in September after inching up by 0.1 per cent in August. The uptick in core prices matched economist estimates.
Finally, in Germany, top economic institutes upgraded the country’s economic growth projection for 2022 but lowered their projection for the current year, citing supply bottlenecks in the manufacturing sector.
The five institutes – the RWI in Essen, the DIW in Berlin, the Ifo in Munich, the IfW in Kiel and Halle’s IWH – cut their growth projections for this year to 2.4 per cent from the 3.7 per cent they had forecast earlier this year.
They said, however, that during the course of 2022 the economy should return to normal capacity utilisation as the adverse effects of the pandemic and supply bottlenecks are gradually overcome. They raised the 2022 growth forecast to 4.8 per cent from their previous forecast of 3.9 per cent.
This article has been prepared by Bank of Valletta plc for general information purposes only.