International Finance

Global economy to grow by 5.5% in 2021: IMF

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The global economy, which was pushed into a recession by the coronavirus pandemic, is forecasted to grow by 5.5 percent this year, according to the International Monetary Fund(IMF). The global economy will grow by 4.2 percent in 2022, the fund further said in its report. The growth is attributed to the vaccination programmes in Asia, Middle East, Europe and the US, and additional policy support from governments.

Gita Gopinath, Chief Economist of the IMF told the media, “In our latest World Economic Outlook forecast, we project global growth for 2021 at 5.5 percent, 0.3 percentage point higher than our October forecast, moderating to 4.2 percent in 2022.”

Pointing out that there is still a great deal of uncertainty associated with the global economy, Gopinath said that greater success with vaccinations and therapeutics and additional policy support could improve outcomes, while slow vaccine rollout, virus mutations, and premature withdrawal of policy support could worsen the outcomes.

Earlier this month, the World Bank said that the global economy is forecasted to expand by 4 percent this year. The economy contracted by 4.3 percent in 2020 due to the measures introduced by different governments across the world to deal with the spread of the Covid-19 virus.

In its, World Bank’s Global Economic Prospects (GEP) report, the bank also warned that increasing Covid-19 cases and delay in vaccine distribution could limit the recovery to just 1.6 percent. The report further forecast the global economy to expand by 3.8 percent in 2022.

World Bank said in a statement, “The near-term outlook remains highly uncertain. A downside scenario in which infections continue to rise and the rollout of a vaccine is delayed could limit the global expansion to 1.6 percent in 2021.”

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