By Philip Clement
Despite uncertainties inherent in the world economy, the International Monetary Fund (IMF) in its world outlook report says the global economy is waxing stronger. In the report released on Tuesday, IMF however, said that the Economic growth led by the United States and China is increasing, posing the risks of uneven global recovery.
“In January we projected global growth at 5.5 per cent in 2021,” said IMF chief Kristalina Georgieva in an address ahead of the body’s annual spring meeting co-hosted with the World Bank.
“We now expect a further acceleration she said ahead of the international organisation’s official update of its forecast in a week.
“Key factors in the improved outlook include the U.S. passage of President Joe Biden’s $1.9 trillion economic relief package and an expected bounce from coronavirus vaccines increasingly available in larger economies Governments played a key role in averting a worldwide depression, with some $16 trillion in fiscal support and a massive liquidity injection by central banks” averting complete disaster.
“Without these steps, the worldwide economic contraction of 3.5 per cent in 2020 “would have been at least three times worse,” she explained.
Speaking further, the IMF boss said the organization is seeing increasing signs of a “multi-speed recovery” powered by the United States and China, which are on track to enjoy growth by the end of 2021 that outpaces their pre-crisis performance.
She however noted that “So much depends on the path of the pandemic which is now shaped by uneven progress in vaccination and the new virus strains that are holding back growth prospects, especially in Europe and Latin America.
“Many are highly exposed to hard-hit sectors, such as tourism. Now they face less access to vaccines and even less room in their budgets,” she added.
On how economies can get out of the woods, Georgieva urges ‘generous investment’ in the production and distribution of vaccines to facilitate the transition to the post-Covid economy.
She also backed increased investment for the most vulnerable countries, as well as spending on infrastructure, health and education so that “everyone can benefit from the historic transformation to greener and smarter economies.”
She said the IMF has already provided $107 billion in financing and debt service relief for the 29 nation poorest nations, including support for sub-Saharan Africa at about 13 times the level previously.