The International Monetary Fund (IMF) has cut its 2021 growth forecasts for advanced economies, particularly the United States, Japan, and Germany.
It is blaming lingering health risks, problems in supply chains and high inflation.
In its latest World Economic Outlook, the IMF projects that global output will increase by 5.9% this year, compared with its projection in July of 6%. It will hit 4.9% in 2022, following a 3.1% decline last year, the IMF added.
Petya Koeva Brooks, deputy director in the IMF's research department, said: "These interruptions are really the result of a very unusual recovery. We've never seen a recovery from a pandemic before. So supply and demand are not matching at this stage. So demand has recovered, and at the same time, supply has not really caught up. We're seeing the impact in a number of sectors."
"One way to sort it out and understand where we are is to think about when economic performance would return to pre-crisis levels. Our forecast for the euro area is that this will be the case in the last quarter of this year. In some Eurozone countries, that level won't be reached until much later, so we have very different forecasts in different countries."
Copyright © Times of London © 2021