The International
Monetary Fund on Tuesday raised its forecast for global economic growth in 2021
and said the coronavirus-triggered downturn in 2020 would be nearly a full
percentage point less severe than expected.
It said multiple vaccine
approvals and the launch of vaccinations in some countries in December had
boosted hopes of an eventual end to the pandemic that has now infected nearly
100 million people and claimed the lives of over 2.1 million globally.But it warned
that the world economy continued to face“exceptional uncertainty”and new waves
of COVID-19 infections and variants posed risks, and global activity would
remain well below pre-COVID projections made one year ago, reports Reuters.
Close to 90 million
people are likely to fall below the extreme poverty threshold during 2020-2021,
with the pandemic wiping out progress made in reducing poverty over the past
two decades. Large numbers of people remained unemployed and underemployed in
many countries, including the United States.
In its latest World
Economic Outlook, the IMF forecast a 2020 global contraction of 3.5%, an
improvement of 0.9 percentage points from the 4.4% slump predicted in October,
reflecting stronger-than-expected momentum in the second half of 2020.It
predicted global growth of 5.5% in 2021, an increase of 0.3 percentage points
from the October forecast, citing expectations of a vaccine-powered uptick
later in the year and added policy support in the United States, Japan and a
few other large economies.
It said the US economy –
the largest in the world – was expected to grow by 5.1% in 2021, an upward
revision of 2 percentage points attributed to carryover from strong momentum in
the second half of 2020 and the benefit accruing from $900 billion in
additional fiscal support approved in December.The forecast would likely rise
further if the US Congress passes a $1.9 trillion relief package proposed by
newly inaugurated President Joe Biden, economists say.
China’s economy is
expected to expand by 8.1% in 2021 and 5.6% in 2022, compared with its October
forecasts of 8.2% and 5.8%, respectively, while India’s economy is seen growing
11.5% in 2021, up 2.7 percentage points from the October forecast after a
stronger-than-expected recovering in 2020.
The Fund said countries
should continue to support their economies until activity normalised to limit
persistent damage from the deep recession of the past year. Low-income
countries would need continued support through grants, low-interest loans and
debt relief, and some countries may require debt restructuring, the IMF said.
Source: Reuters
