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IMF Forecasts Global Economic Growth Amid Uncertainty

Washington D.C., USA - In its latest World Economic Outlook report, the International Monetary Fund (IMF) has forecasted a moderate economic growth globally, despite ongoing uncertainties.

Strong Recovery Expected Despite Challenges

According to the IMF’s April 2022 report, the global economy is expected to recover from the pandemic-induced downturn, driven by continued expansion in developed countries and a gradual recovery in developing economies. The report forecasts a modest 3.8% GDP growth rate for 2022, up from 3.5% last year.

The forecasted growth is attributed to several factors, including:

  • An improvement in global trade
  • Rising consumer demand
  • Accommodative monetary policies

However, the IMF also warned of potential risks, including:

  • Rising inflation
  • Supply chain disruptions
  • Geopolitical tensions

Divergent Performances Among Major Economies

The report highlights the divergent performances of major economies. The United States, Eurozone, Russia, China, and other developed countries are expected to experience a moderate growth rate, while developing economies will continue to face challenges in their recovery.

Armenia’s Economic Recovery

The report notes that the economic recovery in Armenia, a key partner country, is largely dependent on the duration of military conflicts and sanctions imposed. Despite this, remittances to Armenia have increased, and exports of goods and services have shown significant growth.

Commodity Prices Rising

Commodity prices have continued to rise, driven by strong demand and supply constraints. Copper prices, in particular, have fluctuated, influenced by China’s industrial demand and government control over copper reserves.

Monetary Authorities Responding to Crisis

Monetary authorities worldwide have responded to the crisis by:

  • Maintaining low interest rates
  • Providing liquidity
  • Acquiring assets
  • Implementing large-scale economic stimulus packages (developed countries) and gradually reducing support as the pandemic has slowed down (developing countries)

Armenia’s Economy Showing Signs of Recovery

Armenia’s economy, which experienced an economic downturn in 2020, has shown signs of recovery in 2021, driven by:

  • Domestic demand
  • External demand
  • High international copper prices

The country’s GDP growth rate reached 5.7%, with the service sector contributing significantly to this growth.

Conclusion and Key Findings

While the global economy faces challenges, the IMF remains optimistic about its prospects, citing the ongoing vaccination efforts against COVID-19 and the gradual easing of pandemic restrictions.

Key Findings:

  • Global economic growth forecasted at 3.8% in 2022
  • Developed countries expected to experience moderate growth
  • Developing economies facing challenges in recovery
  • Commodity prices rising due to strong demand and supply constraints
  • Monetary authorities maintaining accommodative policies
  • Armenia’s economy showing signs of recovery, driven by domestic demand and external factors

Source: International Monetary Fund (IMF) - World Economic Outlook April 2022 Report.