IMF predicts weaker-than-expected global growth in 2021

IMF predicts weaker-than-expected global growth in 2021

The growth of the world economy will be “slightly” weaker than expected this year, IMF Director General Kristalina Georgieva said today, concerned about inequalities between countries, with the poorest affected by the lack of vaccines.

“We are facing a global recovery that continues to be hampered by the pandemic and its impact,” said Georgieva, in a speech in Milan, released in advance, days before the autumn meetings of the International Monetary Fund (IMF) and the World Bank.

In July, the IMF revised its forecast for world economic growth upwards to 6% in 2021, but that was before the impact of the Delta variant was felt around the world. The Washington institution will publish updated world economic forecasts next week at the opening of the annual meetings, forecasts that are usually preceded by a speech by the IMF leader to advance some general lines.

The United States and China, the main economic powers, remain “the essential engines of growth, despite a slowdown in their momentum”, noted Georgieva.

Some advanced and emerging economies continue to grow, “such as Italy and, more broadly, Europe”. On the other hand, “in many other countries, growth continues to deteriorate, hampered by poor access to vaccines and a limited policy response, particularly in low-income countries,” she said.

The divergence in recovery leads advanced economies to return to levels recorded before the pandemic “until 2022”, when most emerging and developing countries “will take years to recover” from the crisis caused in the spring of 2020 by the covid pandemic. -19. According to the IMF leader, the longer the recovery takes, the greater the long-term impact on these countries, especially in terms of job losses, which particularly affect young people, women and undeclared workers.

For Georgieva, the most immediate obstacle is “the big gap in vaccines”, with many countries still without access to them, “leaving many people without protection against covid-19”.

The director general of the IMF called for a “strong” increase in the delivery of doses and called on the richest countries to fulfill their pledges. In addition to the vaccination problem, some emerging countries and developing economies face price pressures that “should persist,” according to the F. The rise in world food prices is “particularly worrisome” which, “combined with rising energy prices, puts even more pressure on the poorest households,” she added. Georgieva urged central banks to be prepared to act quickly if the recovery moves faster than anticipated and if inflation risks “become tangible”. She also called on governments to speed up reforms to ensure a transition to a green economy that creates new jobs.