IMF lowers global growth forecast slightly for 2021, upgrades Saudi Arabia

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The International Monetary Fund (IMF) lowered its global growth projections for 2021 slightly by 0.1% to 5.9%, but kept it unchanged at 4.9% for 2022.

However, this modest headline revision masks large downgrades for some countries, the fund said in its World Economic Outlook report released today, Oct. 12.

The fund lowered its growth forecasts for the US by 1% to 6% for 2021.

However, it upgraded its 2021 growth forecasts for Saudi Arabia by 0.4% to 2.8%.

“The global recovery continues, but momentum has weakened, hobbled by the pandemic,” said Gita Gopinath, Economic Counsellor and Director of the Research Department at IMF.

She added that the divergences in growth prospects across countries, however, persist and remains a major concern.

Gopinath added that risks to economic prospects have increased and policy trade-offs have become more complex in the ongoing COVID-19 pandemic. Monetary policy will need to walk a fine line between tackling inflation and financial risks and supporting economic recovery.