IMF cuts Canada’s growth forecast for this year, trims view on global rebound amid ‘dangerous divergence’

DM

The International Monetary Fund expressed concern the global economic recovery has lost momentum and become increasingly divided, even as it stuck by its prediction for a robust rebound from the COVID-19 recession. The Washington-based lender now expects output to expand 5.9 per cent worldwide this year, down 0.1 percentage point from what it anticipated in July and a bounce from the 3.1 per cent contraction of 2020, it said on Tuesday in its latest World Economic Outlook. It held the forecast for 2022 at 4.9 per cent. The fund warned threats to growth had increased, pointing to the Delta variant, strained supply chains, accelerating inflation and rising costs for food and fuel. The aggregate figure also masked large downgrades for some countries, especially low-income nations where access to vaccines remains limited. “Overall, risks to economic prospects have increased, and policy trade-offs have become more complex,” Gita Gopinath, the fund’s director of economic research, said in the report’s introduction. “The dangerous divergence in economic prospects across countries remains a major concern.”

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