2021 Global Economic Growth: IMF’s Gita Gopinath breaks down GDP growth projections for 2021
The International Monetary Fund has become more optimistic about the outlook for the global economy as mass vaccinations against Covid-19 gain momentum. However, the foundation is concerned that new strains of the virus may delay the return to normal life..
According to the latest world economic forecast, the IMF expects the global economy to grow 5.5% this year (0.3% more than forecast in October). GDP is expected to grow by 4.2% in 2022.
«Much now depends on the outcome of the mutating virus and vaccine race, and for now, politicians need to continue to provide effective public support. Today, in different countries, the situation is very different.», – said the chief economist of the IMF Gita gopinath (Gita Gopinath).
Over the past few months, the world has seen a sharp increase in the number of cases and deaths from Covid-19, as new strains of the virus are spreading rapidly. Doctors consider them more infectious and deadly..
Due to new outbreaks, many countries have tightened restrictive measures, further exacerbating economic problems.
In fact, the IMF has cut its GDP forecasts for the eurozone this year by 1%. 19 economies of the bloc are expected to grow by 4.2%.
Germany, France, Italy and Spain — the four largest economies in the eurozone — also revised their expectations for the worse.
Economic activity in the region has slowed down in the last quarter of 2020. IMF does not expect EU economy to return to pre-crisis levels by the end of 2022.
According to the fund, the US GDP will grow more than expected. The revision of the forecast by 2% upwards occurred against the backdrop of strong dynamics in the second half of 2020 and additional financial support from the government.
AT December, US Congress approved nearly $ 900 billion stimulus package. Joe biden does not deny that new packages of economic assistance may be involved in the near future.
IMF thinks China should grow 8% this year.
It notes that governments will need to continue to support their economies through fiscal stimulus.
«Political action must provide effective support until recovery continues unaided. It is desirable to focus on promoting key tools to increase potential production volume, as well as accelerating the transition to renewable energy sources», – said IMF representatives.