The latest World Economic Outlook, updating forecasts from July

The latest World Economic Outlook, updating forecasts from July
  • 2021 GDP seen at 5.9% from 6.0% in July
  • 2022 GDP remains at 4.9%
  • Cuts US forecast by 1 percentage point this year to 6.0% from 7.0%
  • China 2021 GDP cut to 8.0% from 8.1%
  • Spain and Germany cut 0.5 pp each
  • Canada lowered by 0.6 pp
  • Italy +0.9 pp
  • France +0.5 pp
  • Eurozone +0.4 pp
  • Risks tilted to the downside including emergence of new variants and more persistent supply-demand mismatches

The IMF highlighted there could be a downgrade recently so this isn't a surprise.

"This modest headline revision masks large downgrades for some countries," Gita Gopinath, chief economist at the IMF, said in an accompanying blogpost.

"The outlook for the low-income developing country group has darkened considerably due to worsening pandemic dynamics. The downgrade also reflects more difficult near-term prospects for the advanced economy group, in part due to supply disruptions."

The IMF chief economist said central banks should be prepared to move quickly on a material rise in inflation expectations.

"Inflation risks are skewed to the upside and could materialize if pandemic-induced supply-demand mismatches continue longer than expected," the report warned.

IMF forecasts