We have cut our global GDP growth forecasts again, and now have reduced our 2021 estimate by a total of 0.7pp since June in response to the spread of Delta, supply-chain disruption, and higher inflation.
The revisions reflect a weaker assessment of the outlook for H2. Not only has it become clearer that the path to normalcy will be longer and bumpier than we thought earlier in the year, but it is becoming increasingly apparent that the unplugging of some supply-chain bottlenecks may be a slow process.
Despite these problems, however, it is worth noting that our global GDP growth projections for both this year and next remain higher than our estimates and those of other forecasters were at the start of the year. With Covid cases waning, many larger economies relaxing restrictions, and supply chain and inflation pressures likely to ease as we enter 2022, there is good reason for remaining upbeat.
Indeed, the fact that both we and the IMF are more optimistic with respect to longer-term scarring from the pandemic, is indicative of the improvements in the outlook since the turn of the year.