Gita Gopinath, chief economist of the International Monetary Fund.
ANDREW CABALLERO-REYNOLDS | AFP | Getty Images
LONDON – The International Monetary Fund has become more optimistic about the world economy as coronavirus vaccines are administered worldwide. However, he is concerned about the risk posed by new variants of Covid for post-pandemic recovery.
According to its latest global economic outlook, released on Tuesday, the institution now expects the world economy to grow 5.5% this year, up 0.3 percentage points from the October forecast. He sees global GDP (gross domestic product) expanding 4.2% in 2022.
“It now depends a lot on the outcome of this race between a mutant virus and vaccines to end the pandemic and the ability of policies to provide effective support until that happens,” said the chief economist of the IMF, Gita Gopinath, in a blog post.
“There is a huge uncertainty and the perspectives vary a lot between countries.”
The world has seen an increase in the number of Covid-19 infections and deaths in recent months as new variants of the coronavirus have spread rapidly. These have been described as more infectious and are potentially more deadly than the original strain.
As a result, many countries have intensified their social restrictions, which has caused more economic pain.
In fact, the IMF cut its GDP forecasts for the eurozone this year by one percentage point. The 19-member region, which has been severely affected by the pandemic, is expected to grow 4.2% this year.
Germany, France, Italy and Spain, the four largest economies in the eurozone, also saw their growth expectations for 2021 lower.
Economic activity in the region slowed in the last quarter of 2020 and is expected to continue until the first half of 2021. The IMF does not expect the euro area economy to return to final levels of 2019 before the end of 2022.
US growth was reviewed
On the other hand, the United States will grow more than expected this year, according to the IMF.
The Fund revised its upward GDP forecast by 2 percentage points due to a strong boost 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 arrive soon.
With a view to emerging markets, China will grow above 8% this year, the IMF said.
“China returned to its pre-pandemic prevention level in the fourth quarter of 2020, ahead of all major economies. The United States is expected to surpass its pre-year levels, well ahead of the zone. of the euro, “Gopinath said on Tuesday.
The IMF reiterated that governments will need to continue to support their economies through fiscal stimulus to bolster economic recovery.
“Policy actions should ensure effective support until the recovery is firmly underway, with an emphasis on advancing the key imperatives of increasing potential output, ensuring participatory growth that benefits all, and accelerating the transition to a lower carbon dependence, ”Gopinath added.