By Tom Burnett CFA
On April 19, 2022, the International Monetary Fund (“IMF”) lowered its estimates for global GDP growth from its projections made in January and last October. The new Report listed uncertainties from inflation and the Russian invasion of Ukraine as the primary reasons for the lower forecasts.
Global GDP growth is now projected at 3.6% in 2022 and in 2023. In 2021, global GDP growth was 6.1% as the world’s economies recovered from the negative impact of the Covid-19 outbreak. The latest estimates are down by 1.3% from the 2022 forecast made last October.
In the April Report, the IMF estimates that the U.S. economy will grow by 3.7% in 2022 and by 2.3% in 2023. In 2021, the growth rate was 5.7%, reflecting the recovery from the Covid pandemic. The latest forecast for 2022 is down by 1.5% from the October 2021 projection.
The EU is now expected to achieve GDP growth of 2.8% this year and 2.3% in 2023. Last October, the IMF projection for 2022 was 1.5% higher than the expected 2.8% rate now called for.
The U.K. is seen growing at 3.7% this year, but only 1.2% in 2023. In 2021, the U.K. grew by 7.4% from the weak 2020 year when uncertainties from Covid-19 and Brexit caused a major reduction in the country’s GDP output. The latest report gives the U.K. a GDP target that is 1.3% lower than the one forecast last October.
China grew its GDP by 8.1% in 2021, but the IMF now sees growth of just 4.4% in 2022 and 5.1% in 2023. The 2022 forecast is 1.2% lower than the October projection.
World trade grew by 10.1% in 2021, but the IMF now expects growth of just 5.0% in 2022 and 4.4% in 2023. In the October report, the estimate for 2022 growth was higher by 1.7%.
Tom Burnett CFA is Director of Research