The IMF’s World Economic Outlook report for October 2021 is characterized by its authors as showing “a dangerous divergence in economic prospects across countries.” This refers to the forecast growth for low-income countries in 2021 being reduced by a full percentage point from the IMF’s forecast last year, to 3.0%.
One telling indication is the outrageous fact that indebtedness of the 46 least developed countries (LDCs) increased by 12% during the pandemic thus far, despite all the UN- and IMF-sponsored meetings for “debt forgiveness initiatives,” etc.
The country growth forecasts themselves are unimportant; since the report is trying to estimate “growth” in 2021 on the basis of collapse in 2020, the resulting forecast “growth” levels are quite meaningless. What is ominous is the summary statement in the report’s introduction—although stated in deep globalist slang—"Emerging and developing economies, faced with tighter financing conditions and a greater risk of de-anchoring inflation expectations, are withdrawing policy support more quickly despite larger shortfalls in output. Overall, risks to economic prospects have increased, and policy trade-offs have become more complex.” In other words, many low-income countries’ economies are collapsing or threatened with collapse; the IMF expects some of them to be “saved” in 2022 only because they specialize in exporting goods whose prices are rapidly inflating.
The report urged central banks to be “very, very vigilant” against signs that inflation is not going to be transitory, and to be ready to raise interest rates in response.
