The International Monetary Fund revised down its global growth forecast for this year by half a percentage point.
Global GDP is projected to rise by 4.4% year-on-year in 2022, down from a previous estimate of 4.9% made in its October report, "largely reflecting forecast markdowns in the two largest economies -- the US and China," the IMF said in its World Economic Outlook on Tuesday.
It stressed that the global economy entered this year in a weaker position than previously expected owing to mobility restrictions due to the omicron COVID-19 variant, rising energy prices and supply disruptions-induced high inflation rates and China's indebted real estate sector.
Noting that the omicron variant-related measures to weigh on growth in the first quarter of 2022, the IMF said: "The negative impact is expected to fade starting in the second quarter, assuming that the global surge in Omicron infections abates and the virus does not mutate into new variants that require further mobility restrictions."
The global growth is expected to slow to 3.8% in 2023, revised up by 0.2 percentage point from the previous forecast.
This upward revision is mostly mechanical, the fund said, adding that the shocks dragging 2022 growth will dissipate and global output in 2023 will grow a little faster.
The IMF revised down its growth forecast for the US economy for this year by 1.2 percentage points with "a revised assumption removing the Build Back Better fiscal policy package from the baseline, earlier withdrawal of monetary accommodation, and continued supply shortages."
US economy is estimated to grow by 4% in 2022 and 2.6% in 2023.
US President Joe Biden unveiled a $1.75 trillion Build Back Better framework for social and climate change in October 2021, dubbing it "fiscally responsible” and "fully paid for."
IMF's projection for the world's second largest economy China was a 4.8% growth for this year and 5.2% for next year, both were revised down.
"In China, pandemic-induced disruptions related to the zero-tolerance COVID-19 policy and protracted financial stress among property developers have induced a 0.8 percentage-point downgrade (for 2022)," it noted.
Prolonged supply constraints and coronavirus disruptions led a 0.4 percentage point downward revision in the euro area, the IMF pointed out, as the economic growth in the zone expected to came in at 3.9% in 2022.
The euro area will expand by 2.5% next year, the fund estimated.
The IMF expected that the German economy will rise by 3.8% this year, a 0.8 percentage point lower from the previous report largely due to its exposure to supply chain shocks.
The forecast for emerging market and developing economies was revised down by 0.3 percentage point to 4.8% in 2022.
Meanwhile, inflation is expected to remain elevated in the near term, averaging 3.9% in advanced economies and 5.9% in emerging market and developing economies in 2022, before subsiding in 2023, the IMF said.