The International Monetary Fund has lowered its forecast for the global economy's growth this year, citing the spread of the omicron variant of the coronavirus as a notable factor.
In a quarterly update of its World Economic Outlook, the IMF predicted the global economy would expand 4.4% in 2022, lower than the 5.9% forecast one year ago and the 4.9% growth rate predicted in October.
The report also cited higher energy prices, rising inflation and larger than predicted slowdowns in the United States and China, the world's largest economies, as reasons for lowering its global growth forecast.
"The global economy enters 2022 in a weaker position than previously expected," the IMF said in the report. "The emergence of the omicron variant in late November threatens to set back this tentative path to recovery."
The 190-country lending agency cut its growth forecast for the U.S. to 4% from the 5.2% it predicted in October. The agency said it lowered growth forecast for the U.S. economy because President Joe Biden's massive Build Back Better social policy bill has stalled in Congress.
The U.S. central bank's tighter monetary policy and supply chain problems that have plagued U.S. manufacturers and other businesses were also factors in the revised forecast, the IMF said.
The agency slashed China's growth expectations to 4.8% this year, dramatically lower than the 8.1% forecast last year and nearly 1% lower than what it expected in October.
China's zero-tolerance approach to the coronavirus pandemic and related lockdowns have slowed private consumption while the real estate sector remains in a "period of protracted stress," the IMF said.
After the global economy expanded nearly 6% last year, Tuesday's IMF report cut growth projections for nearly every country. India was a notable exception, with the IMF raising its projected growth rate by 0.5% to nine percent.