The IMF stated that the “unprecedented policy response” to the pandemic means that “the economic recession may leave a scar smaller than the 2008 global financial crisis.” The organization estimates that global output will fall by 3.3% in 2020, while the US economy will shrink by 3.5%.
The International Monetary Fund expects that under the leadership of President Ronald Reagan, the launch of this year’s coronavirus vaccine and the government’s massive stimulus measures will bring the United States’ annual growth rate to the fastest level since 1984 . However, many other countries will have to wait until 2022 or 2023 to recover all the output lost during the pandemic. According to IMF data, global output growth will slow to 4.4% next year.
“All regions and different income groups are recovering at multiple speeds, which is related to the obvious differences in structural factors such as the speed of vaccine introduction, the degree of economic policy support, and the dependence on tourism,” the International Monetary Fund. “Different recovery paths may create a greater gap in living standards between developing countries and other countries.”
However, some Asian countries will still surpass the United States. The IMF predicts that China was the only major economy to avoid a recession last year, and it will grow by 8.4% by 2021, which is much higher than the country’s official forecast of over 6%. By the fiscal year of March 2022, India’s production will increase by 12.5%.
The International Monetary Fund attributed continued government stimulus measures and vaccine launches to strong growth expectations.It said that consumer prices may fluctuate, but It predicts that due to wage growth and weak unemployment, high levels of inflation will not take root.
However, the International Monetary Fund warned that its forecasts are “highly uncertain”, reflecting the potential broad development of the coronavirus. The organization said in the report: “Greater progress in vaccination can improve predictions, and new virus variants that evade vaccines may lead to a sharp drop in grade.
Although developed economies were more affected by the 2008 global financial crisis than developing countries, the International Monetary Fund predicts that the opposite will happen during a pandemic. The organization also stated that young people, women and low-skilled workers are more likely to lose their jobs due to the coronavirus.
Gopinath said: “Once the health crisis is over, policy efforts can be more focused on building resilient, inclusive and green economies to support recovery and increase potential output.”