The International Monetary Fund (IMF) slashed its 2021 growth forecast for the United States as the COVID-19 pandemic continues to weaken global economic recovery.
In its latest World Economic Outlook report on Oct. 12, the IMF cut its U.S. growth forecast to 6 percent this year — a full percentage point down from the July update — and slower next year at 5.2 percent.
The IMF cited surging inflation in the U.S. as largely weighing on the country’s growth.
As COVID-19 restrictions relaxed earlier this year, disrupted supply chains have been slower to respond to accelerating demand — in June, the U.S. saw inflation rates pushed to a 13-year high of 5.4 percent.
“Although price pressures are expected to subside in most countries in 2022, inflation prospects are highly uncertain,” the report said.
The economic slowdown is also partly caused by policy choices such as not lifting the U.S. debt ceiling “in a timely fashion” and the expiration of rent and mortgage moratoriums, according to the IMF.
The IMF now expects 5.9 percent growth in the world economy this year and 4.9 percent next year due to supply problems, rising inflation in developing countries, and worsening COVID-19 situations in low-income countries.
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