IMF: 'Exceptional uncertainty' persists
Andrea Shalal - The International Monetary Fund has raised its forecast for global economic growth in 2021 and said the coronavirus-triggered downturn last year - the biggest peacetime contraction since the Great Depression - would be nearly a full percentage point less severe than expected.
The global lender said multiple vaccine approvals and the start of vaccinations in some countries had boosted hopes of an eventual end to the pandemic that has now infected nearly 100 million people and claimed the lives of more than 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-19 projections made one year ago.
IMF chief economist Gita Gopinath said US president Joe Biden's pledge to fund the World Health Organisation's COVAX vaccine initiative marked "a very big step" to containing the pandemic and ensuring more equitable distribution of vaccines.
"Much more will be needed, because as we can see, given the mutating virus, that this is not a problem that's going away anytime soon," Gopinath on Tuesday told a news conference.
"There is still a tremendous amount of uncertainty," she told Reuters in a separate interview. "We know that the health crisis is not over until it's over everywhere."
MOMENTUM
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, given stronger-than-expected momentum in the second half of last year.
It predicted global growth of 5.5% in 2021, 0.3 percentage points better than in October, 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 about US$900 billion in additional fiscal support approved in December.
The outlook would likely improve further if the US Congress passes a US$1.9 trillion relief package proposed by Biden, Gopinath said, forecasting a 5% boost over three years if the package is approved by the US Congress.
CHINA
China's economy is expected to expand by 8.1% in 2021 and 5.6% in 2022, compared with the 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 recovery 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. – Nampa/Reuters
The global lender said multiple vaccine approvals and the start of vaccinations in some countries had boosted hopes of an eventual end to the pandemic that has now infected nearly 100 million people and claimed the lives of more than 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-19 projections made one year ago.
IMF chief economist Gita Gopinath said US president Joe Biden's pledge to fund the World Health Organisation's COVAX vaccine initiative marked "a very big step" to containing the pandemic and ensuring more equitable distribution of vaccines.
"Much more will be needed, because as we can see, given the mutating virus, that this is not a problem that's going away anytime soon," Gopinath on Tuesday told a news conference.
"There is still a tremendous amount of uncertainty," she told Reuters in a separate interview. "We know that the health crisis is not over until it's over everywhere."
MOMENTUM
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, given stronger-than-expected momentum in the second half of last year.
It predicted global growth of 5.5% in 2021, 0.3 percentage points better than in October, 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 about US$900 billion in additional fiscal support approved in December.
The outlook would likely improve further if the US Congress passes a US$1.9 trillion relief package proposed by Biden, Gopinath said, forecasting a 5% boost over three years if the package is approved by the US Congress.
CHINA
China's economy is expected to expand by 8.1% in 2021 and 5.6% in 2022, compared with the 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 recovery 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. – Nampa/Reuters
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