The January 2021 World Economic Forecast Report published by the International Monetary Fund (IMF) predicts 5.5% growth in the global economy this year, although there is a certain hedge of bets arising from what is believed to be fresh is now the basis of his projection. chameleon-like attacks from the global COVID-19 pandemic.
The Fund is proposing its growth projection in 2021 against the backdrop of “exceptional uncertainty” following the long-awaited realization of the vaccine and the news that an apparent mutation of the virus could threaten if it did not abolish an effect completely the vaccine.
The IMF’s 2021 forecast is being revised up 0.3% compared to the Fund’s previous forecast, he said, which reflects expectations of “strengthening vaccine-powered activity later in the year and additional policy support in a short period of time. from major economies. ”
While the outlook is not topped with certainty, however, this year’s projected 2021 global growth recovery follows a “drastic fall in 2020” which the Fund said “has had acute adverse effects on women, youth, the poor, those who are employed informally, and those working in link-intensive sectors. “The Fund sets the global growth contraction for 2020 at -3.5 percent, 0.9 percentage points higher than forecast in the previous forecast.
Not surprisingly, the IMF says the strength of this year’s recovery will be uneven, varying significantly across countries. Factors that will weigh heavily in influencing the rate of recovery include “access to medical interventions, effectiveness of policy support, exposure to cross-country overflows, and structural features that come into the crisis.”
The Fund states that such growth occurring in individual countries will rely strongly on policy actions that “secure effective support until recovery is firmly underway, with an emphasis on promoting key fundamentals of raising potential output , achieve participatory growth that benefits everyone, and accelerate the transition to lower carbon dependency. ”
In the meantime, the IMF advocates for “strong multilateral cooperation” which it says is required to bring COVID-19 under global control. Such efforts include strengthening funding for the COVID-19 Global Vaccine Access Facility (COVAX) where countries have the opportunity to give their populations early access to effective vaccines. Last week the Ethiopian-born Director-General of the World Health Organization, Tedros Adhanom Ghebreyesus, openly criticized what is widely believed to be a country’s weighted access to vaccines that favor rich nations. The IMF says it wants to see an acceleration of “access to vaccines for all countries, ensuring universal distribution of vaccines, and facilitating access to therapeutics at affordable prices for all.”
Meanwhile, the Fund says several low-income developing countries have entered the current crisis with high debt which it says will rise further during the pandemic. “The global community will need to continue to work closely to ensure adequate access to international liquidity for these countries. Where sovereign debt is unsustainable, eligible countries should work with creditors to restructure their debt under the Common Framework agreed by the G20, ”the Fund adds.