IMF Downplays US and China Growth Prospects

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IMF Downplays US and China Growth Prospects

The IMF reduced its projections for global growth to 4.4%, down by 0.5%, which is significant in global terms. In particular, the group said the world’s number one and two economies, the US and China, would grow more slowly than anticipated as recently as a few months ago.

Citing the continuing effect of the pandemic, the IMF expects economic uncertainty to cause supply chain crunches, high inflation, and increasing consumer prices. Total economic losses from the pandemic are thought to be edging toward $14 trillion.

The IMF expects America's economic growth to be 4% in 2022, down from 5.6% last year. By removing 1.2% from its US growth prospects, the IMF cites the failure of President Biden's Build Back Better economic plan as a contributing factor.

China’s economic expansion prospects are pegged at 4.8%, markedly down from the 8.1% it achieved in 2021. The IMF has cut China’s growth prospects by 0.8%, citing weak personal spending as one area of concern. 

What does this mean for me?

By downgrading the economic prospects of the world’s two largest economies, the IMF is painting a less-than-rosy picture for global markets this year.

As a market watcher, it may be difficult for you to truly put the scale of these numbers into context. However, what is not unclear is that many of the same pandemic-related challenges will continue to affect your favorite trading instruments.

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