Logo of the International Monetary Fund’s headquarters in Washington, DC
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London-The International Monetary Fund (IMF) predicts that with the launch of the Covid-19 vaccine, the economy will recover in 2021, but due to the different rates of vaccination around the world, it warns of “serious challenges.”
The organization said on Tuesday that it expects the world economy to grow by 6% in 2021, higher than the 5.5% forecast in January. Looking further ahead, global GDP (Gross Domestic Product) is expected to grow by 4.4% in 2022, higher than the 4.2% previously estimated.
Gita Gopinath, chief economist of the International Monetary Fund, stated in the latest World Economic Outlook report: “Even if there is a high degree of uncertainty about the path of the pandemic, get rid of this health and economic crisis. The way is becoming more and more obvious.
The latest round of fiscal stimulus measures in the United States and the launch of global vaccines have made the organization more confident in this year’s global economy.
Gopinas added: “Nevertheless, this prospect still presents serious challenges related to differences in the speed of recovery between and within countries and the possible sustained economic losses caused by the crisis.”
The IMF estimates that the economic growth of advanced economies this year is 5.1%, while that of the United States is 6.4%.
At the same time, the organization’s forecast for the growth of emerging and developing economies in 2021 is 6.7%, and India is expected to grow by as much as 12.5%.
Gopinath warned: “In the country, income inequality may increase because young workers and people with relatively low skills are more affected not only in developed markets but also in emerging markets and developing economies. She added that the decline in female employment rates has also exacerbated the gap.
Therefore, the International Monetary Fund stated that governments should continue to focus on “escape the crisis” by providing financial support, including their healthcare systems. The report added that in the second phase, “policymakers will need to limit the long-term economic scars caused by this crisis” and increase public investment.
Gopinas said: “If no extra effort is made to make everyone enjoy a fair view, the transnational gap in living standards may be greatly widened, and the trend of global poverty reduction for decades may be reversed.”
The latest forecasts indicate that the United States will experience a solid economic recovery in 2021 compared to most parts of the world (which may take longer to return to pre-crisis levels).
The US$1.9 trillion coronavirus rescue plan provided by President Biden, which came into effect last month, has largely contributed to the positive evaluation of the United States.
Therefore, according to the latest forecast of the International Monetary Fund, the unemployment rate in the United States is expected to fall from 8.1% in 2020 to 5.8% this year, and to 4.1% in 2022.
Treasury Secretary Janet Yellen (Janet Yellen) as early as February said that the United States may return to full employment in 2022. “At that time, we had absolutely no reason to experience a long-term slow recovery,” she told CNN at the time.
The latest forecast from the International Monetary Fund confirms that the United States is not only expected to return to this year, but will also exceed Kuwait’s previous level.
Gopinas added: “Among advanced economies, the United States is expected to exceed Covid’s previous GDP levels this year, while many other countries in the group will only return to pre-COVID levels in 2022.”