War Set Back the Global Recovery - GDP Growth 2021

                 This post is a summary of the book with the incomplete title above published in April 2022 at https://www.imf.org/en/Publications/WEO/Issues/2022/04/19/world-economic-outlook-april-2022

                 Global economic prospects have worsened significantly since our last forecast in January. At the time, we had projected the global recovery to strengthen from the second quarter of this year after a short-lived impact of the Omicron variant. Since then, the outlook has deteriorated, largely because of Russia's invasion of Ukraine, and the sanctions aimed at pressuring Russia to end hostilities. Beyond the immediate humanitarian impacts, the war will severely set back the global recovery, slowing growth and increasing inflation even further. This report projects global growth at 3.6% in 2022 and 2023. Both Russia and Ukraine are projected to experience large GDP contractions in 2022. The economic effects of the war are spreading far and wide, mainly through commodity markets, trade and financial linkages. Because Russia is a major supplier of oil, gas, and metals, and together with Ukraine, of wheat and corn, the current and anticipated decline in the supply of these commodities has already driven their prices up sharply. Even prior to the war, inflation had surged in many economies because of soaring commodity prices and pandemic-induced supply-demand imbalances. Although bottlenecks are expected to eventually ease as production elsewhere responds to higher prices and new capacity becomes operational, supply shortages in some sectors are expected to last into 2023. As a result, inflation is now projected to remain elevated for much longer than previous forecast, in both advanced and emerging markets. An increase of 17.2% in beverage prices and a 21.8% rise in cereal prices drove up the cost of food. Wheat prices rose by 26.4%, as sevre drought in Canada and across the northern plains of the U.S. Looking ahead, a continuation of war in Ukraine, a major producer of wheat and corn could fuel an additional surge in world cereal prices.                                                                                                                                                                     Below the GDP growth in 2021, from the highest growth to the smallest growth. The first column is for countries in the American continent, and the other is for some countries in the rest of the world. As previously forecasted, Guyana had one of the highest GDP growth of the world last year. The same had happened in 2020. Congratulations to our neighboring country.

GDP 2021 in PanAmerican countries                                 Rest of the World

Guyana        19.9%                                                                       Ireland      13.5%          

Panama        15.3%                                                                      Botswana     12.5%

Peru         13.3%                                                                            Turkey       11%

Honduras        12.5%                                                                     India        8.9%                                         

 Chile           11.7%                                                                         Greece        8.3%

Nicaragua         10.3%                                                                    China        8.1%

Colombia        10.6%                                                                      U. K.         7.4%

Argentina        10.2%                                                                       France        7.0%

Guatemala         8.0%                                                                       Italy         6.6%

Costa Rica         7.6%                                                                      Poland        5.7 %

Bolivia             6.1%                                                                     Philippines      5.6%

U.S.A.           5.7%                                                                            Spain         5.1%

Mexico            4.8%                                                                      South Africa       4.9%

Canada           4.6%                                                                       Portugal         4.9% 

Brazil          4.6%                                                                          Australia        4.7 %

Uruguay           4.4%                                                                      Russia         4.7%

Paraguay           4.2%                                                                     Norway        3.9%

Ecuador         4.2%                                                                          Germany         2.8%

Venezuela      -1.5%                                                                            Japan          1.6%