Omicron variant likely to downgrade IMF's October projections for global growth, MD says

The ‘highly mutated’ Omicron COVID variant is likely to reinforce a downgrade of the International Monetary Fund’s (IMF) outlook on the global economy, organisation chief Kristalina Georgieva said on Friday. While businesses across the world have been witnessing a rebound, the aftereffects of the Delta strain continue to jeopardise the growth. Reiterating the same, Georgieva said that the IMF was concerned with the “loss of momentum” of global growth due to the impact of the COVID and newly emerging variants. 

"Let's be very frank: A new variant that may spread very rapidly can dent confidence and in that sense, we are likely to see some downgrades of our October projections for global growth," Georgieva said at a live-streamed discussion. 

"The Delta variant proved to be a disruption that caused some additional delays in production" of goods in the United States and China, the leading engines for world growth, she added. 

Speaking at a live discussion on the global economy, the IMF chief said that they were predicting “some downgrades” in the October projections of global growth. Notably, the financial organisation in October predicted that economies would regain their pre-pandemic aggregate inputs next year. In addendum, it also speculated global economies to exceed their respective aggregates by 0.9% by 2024.

IMF predicts steady economic growth in India

Looking back on India's history, the IMF also noted that India was among the fastest-growing economies in the world before the pandemic lifted millions of people out of poverty. However, the pandemic has now placed unprecedented challenges in front of the country causing a major health and economic crisis. Winding data on the country's GDP numbers, it said that a sharp fall was witnessed in the second wave and now the recent indicators suggest an ongoing recovery. 

The IMF also projected India's economic growth at 9.5% in the 2021-22 financial year followed by headline inflation of 5.6%. Furthermore, the test predicted economic growth of 8.5% in 2022-23 FY.

Image: Pixabay/Kristalina Georgieva