The International Monetary Fund on Tuesday raised the global growth forecast for next year and the growth is projected to be driven largely by the expansion in the advanced economies, while their emerging and developing peers are set to have modest gains.

The global growth forecast for 2022 was raised to 4.9 percent from 4.4 percent, the IMF said in an update to its World Economic Forecast.

“The 0.5 percentage-point upgrade for 2022 derives largely from the forecast upgrade for advanced economies, particularly the United States, reflecting the anticipated legislation of additional fiscal support in the second half of 2021 and improved health metrics more broadly across the group,” the IMF said.

The growth projection for this year was retained at 6.0 percent.

“The recovery is not assured until the pandemic is beaten back globally,” IMF Chief Economist Gita Gopinath said.

The global lender forecast inflation to return to its pre-Covid levels in most countries next year, once the impact of the unusual developments related to the pandemic and transitory supply-demand mismatches work their way through prices.

High food prices may lead to elevated inflation in some emerging market and developing economies, the report said.

The IMF urged central banks to generally look through transitory inflation pressures and avoid tightening until there is more clarity on underlying price dynamics.

The lender also stressed that clear communication from central banks on the outlook for monetary policy will be key to shaping inflation expectations and safeguarding against premature tightening of financial conditions.

“There is, however, a risk that transitory pressures could become more persistent and central banks may need to take preemptive action,” the IMF said.

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