The International Monetary Fund is lowering its forecast for the global economy citing the spread of the omicron variant of the coronavirus, higher energy prices, rising inflation and a worsening outlook for the world’s two largest economies – the United States and China.
Gita Gopinath, economic advisor and director of the research department of the International Monetary Fund: “At the beginning of the third year of the pandemic, the death toll has risen to 5.5 million. The associated economic losses are expected to total nearly $13.8 trillion by 2024 compared to pre-pandemic projections.”
Global growth is expected to slow to 4.4 percent from 5.9 percent. The IMF lowered its forecast for the euro area by 0.4 percentage points to 3.9 percent in 2022. For 2023, the IMF expects growth to slow to 2.5 percent. Corona is still in control of the economy. But that, experts say, is about to change. Gita Gopinath again: “The latest global economic outlook from the IMF assumes that Omicron will weigh on economic activity in the first quarter of this year, but that this effect will subside from the second quarter.”
A return to an extensive normality is of central importance for the European and also for the global economy. Even more state of emergency is probably difficult to cope with.