Gita Gopinath, Chief Economist of the International Monetary Fund.
ANDREW CABALLERO-REYNOLDS | AFP | Getty Images
LONDON – The International Monetary Fund has become increasingly interested in the global economy, as coronavirus vaccines are administered worldwide. He is concerned, however, about the risk of Covid’s new variants overcoming diffuse relapses.
According to its latest Global Economic Forecast, released on Tuesday, the foundation now expects the global economy to grow 5.5% this year – an increase of 0.3 percent from the October forecast. It sees global GDP (gross domestic product) expand 4.2% in 2022.
“Much is now dependent on the outcome of this race between mutating viruses and vaccines to end the pandemic, and the ability of effective support policies to make that happen,” said the IMF Chief Economist. Gita Gopinath in a blog post.
“There is still great uncertainty and expectations vary greatly across countries.”
The world has seen staggering numbers of Covid-19 diseases and deaths over the past few months, as new strains of the coronavirus have spread rapidly. They have been said to be more contagious and potentially more lethal than the original species.
As a result, many countries have implemented their social constraints, which have caused further economic pain.
In fact, the IMF cut its GDP projections for the euro zone this year by 1 percentage point. The 19-ball area, which has been hit hard by the pandemic, is now expected to grow by 4.2% this year.
Germany, France, Italy and Spain – the four largest economies in the euro zone – also saw their growth prospects cut for 2021.
Economic activity in the region slowed in the last quarter of 2020 and this is expected to continue into the first part of 2021. The IMF does not expect the eurozone economy to return to late 2019 levels by the end of 2022.
US growth refreshed
On the other hand, the United States is poised to grow larger than expected this year, according to the IMF.
The Fund revised its GDP forecast up 2 percentage points behind a strong move in the second half of 2020 and additional fiscal support. GDP is now seen at 5.1% this year.
The U.S. Congress approved nearly $ 900 billion in a stimulus package in December and President Joe Biden has suggested that more aid packages could come soon.
Looking at emerging markets, China is expected to grow above 8% this year, the IMF said.
“China returned to its pre-pandemic forecast level in the fourth quarter of 2020, ahead of all major economies. The United States is expected to exceed its pre-Covid levels. this year, well ahead of the eurozone, “Gopinath said Tuesday.
The IMF reiterated the need for governments to continue to support their economies through fiscal stimulus to support economic recovery.
“Policy actions should ensure effective support for the recovery to take place firmly, with an emphasis on taking forward key needs to increase productivity, ensuring sustainable growth. -partist that will benefit all, and accelerate the transition to lower carbon dependence, “Gopinath said.