The IMF lowered its global growth forecast for 2021.

The International Monetary Fund warns that inflation in 2022 will be higher than expected and that the spread of the Omicron variant will only exacerbate this, by the worsening global economy.

Read more: World Bank warns of "grim outlook" for global economy

The IMF issued a quarterly update for October 2021, anticipating a 4.4% growth in 2022, which is a 0.5% decrease. It was emphasized that the economy will be performing weakly.

Due to COVID-19, the global economy will have losses equivalent to $13.8 trillion by 2024 in comparison to the economic trend predicted before the pandemic started, as explained by Gita Gopinath, the economic counselor for the IMF.

The IMF attributed the trend retardation to rising cost pressures and the Omicron variant, explaining that while the 2022 prediction for the US and China will be exceptionally worse, there are some countries that will be spared.

The UK will be growing 4.7% in 2022, which is a 0.3 point cut from the IMF's 2021 forecast. However, the UK will grow faster than the other 6 members of the G7 countries, which are the US, Japan, Germany, France, Italy, and Canada.

As for the stock market, Gopinath expects to see corrections in market share prices as global interest rates went up this year, given the information provided by central banks regarding their decisions.

Furthermore, any military escalation between Russia and Ukraine will also affect the market, sending already-high global energy costs soaring.

“Meanwhile, inflation has been higher and more broad-based than anticipated, particularly in the US. Adding to these pressures, the retrenchment in China’s real estate sector appears to be more drawn out, and the recovery in private consumption is weaker than previously expected.”

The biggest downgrade is attributed to the US: IMF's growth forecast decreased 1.2 %, down to 4%. Germany and Canada saw 0.8 points cut down, in addition to 0.4 points for France and Italy. China's growth forecast, finally, is down 0.8 points to 4.8%.

“Risks to the global baseline are tilted to the downside,” the IMF said. “The emergence of new Covid-19 variants could prolong the pandemic and induce renewed economic disruptions. Moreover, supply chain disruptions, energy price volatility, and localized wage pressures mean uncertainty around inflation and policy paths is high.”

“With the pandemic continuing to maintain its grip, the emphasis on an effective global health strategy is more salient than ever. Worldwide access to vaccines, tests, and treatments is essential to reduce the risk of further dangerous Covid-19 variants.”

Every April and October, the IMF publishes its world economic outlook.