United State. The International Monetary Fund raises its growth forecast for 2021 to 5.5% due to new vaccines and stimuli in the United States.
Madrid 26 single. 2021 (Europa Press) –
The global economy will recover this year by 5.5%, after suffering a 3.5% collapse in 2020, while in 2022 it will revise its expansion rate to 4.2%, according to the International Monetary Fund (IMF), which reviewed GDP growth. In 2021, an increase of three-tenths is expected to reflect the expected positive impact of vaccines and new stimuli expected in advanced economies such as Japan and the United States.
“Economic activity appears to be adjusting over time with a moderation in intense communication activities,” the institution says in its Global Economic Outlook Update, highlighting that it expects additional stimulus measures that were announced at the end of last year, especially in US and Japan, “Provide more support in 2021-22 to the global economy,” which is a stronger starting point for the global forecasts for this year and next year than expected in October.
However, despite a more solid starting point for its forecasts, the International Monetary Fund warns of an increase in infections by the end of 2020, including new strains of the virus, in addition to new restrictions applied, logistical problems in vaccine distribution and uncertainty. On her acceptance of “important negative news points.”
He stressed that “there is still a lot to be done on the economic and health policy fronts to limit the continuing damage from the severe downturn of 2020 and ensure a sustainable recovery.”
According to the main scenario taken by the International Monetary Fund, the institution is confident that after the initial weakness in early 2021, it will give way to increased momentum during the second quarter of the year as vaccines become more available, which will allow it to boost activity from greater physical contact, thus Allows growth to pick up in the second half of the year.
Despite this recovery, the International Monetary Fund warns that global activity will remain well below pre-epidemic levels over the forecast horizon, stressing that the strength of the recovery will be uneven across economies, depending on the severity of the crisis they have suffered, the economic structure and reliance on Intense physical contact activities.
In this sense, the new IMF forecast forecasts growth of 4.3% of GDP for advanced economies, four-tenths more than expected in October, after an estimated contraction of 4.9% in 2020, while the fund expects growth of 3.1% in 2022. Ten more than her previous forecast.
This improvement in the outlook for advanced economies is mainly dependent on the strong advance of the US forecast in 2021, when the country’s GDP will grow by 5.1%, two percentage points more than expected in October, after contracting by 3.4% in 2020, although From for 2022, the International Monetary Fund cut its previous forecast by four-tenths, limiting expansion to 2.5%.
In Japan’s case, the corporation expects GDP growth this year and later of 3.1% and 2.4%, respectively, meaning an eight-tenths improvement for this year and seven in 2022 compared to its forecast for October, after the contraction. 5.1% in 2020.
In contrast, the International Monetary Fund cut its eurozone growth forecast by one-tenth, to 4.2%, after suffering a decline in GDP of 7.2% in 2020. However, the institution expects growth in 2022 of 3.6%, an increase of half Percentage point. Than expected last October.
In turn, the United Kingdom also saw a decline in its growth forecast for 2021 to 4.5% from the expected 5.9% in October, after suffering a 10% contraction in 2020, only exceeded by the estimated 11.1% for Spain, while for the next year the International Monetary Fund improved its forecast by an amount 1.8 percentage points, to 5%.
In the case of emerging and developing economies, the new IMF forecasts indicate an expansion of 6.3% this year, three-tenths more than previously expected, while in 2022 their growth will decline to 5%, one-tenth less than previous expectations, after recording. Contraction estimated at 2.4% in 2020.
China, the only major global economy to avoid a recession in 2020, with GDP growth of 2.3%, will grow 8.1% in 2021, one-tenth less than the International Monetary Fund’s forecast in October, to revise its expansion rate to 5.6%. A year later, it’s twenty less than previously expected.
The International Monetary Fund warns that “as noted in the October 2020 report, the epidemic is expected to reflect the progress made in reducing poverty in the past two decades,” and it is estimated that nearly 90 million people may decline due to below the extreme poverty line during the 2020- 21.
Alternative risks and scenarios
The International Monetary Fund warns in its analysis that global growth may be weaker if the virus is not contained enough and infections and deaths rise rapidly before vaccines become widely available, and also if restrictions are more severe than expected.
Slow progress on the health front can slow the path out of the crisis and erode confidence, especially if there is a delay or vaccination in vaccines or if they provide less immunity than expected, he says.
Moreover, if supportive policies are withdrawn before the recovery takes root, this could lead to a sharp increase in viable but illiquid company bankruptcies, leading to further job and income losses.
Consequently, the International Monetary Fund proposes a counter-scenario in which vaccination develops more slowly and recovery slows, subtracting around 0.75 points from the base growth scenario projected for 2021.
In contrast, in a more optimistic scenario, the International Monetary Fund estimates that its central growth forecast for this year could be exceeded by 0.75 percentage points, while the 2022 forecast could improve by about one percentage point.