The International Monetary Fund (IMF) says the global economy is projected to grow at six per cent in 2021, moderating to 4.4 per cent in 2022.
The April 2021 World Economic Outlook (WEO) was presented on Tuesday in Washington D.C. by Gita Gopinath, the fund’s Chief Economist at the ongoing IMF/World Bank Spring Meetings which began on Monday.
The report said that the projection was coming after an estimated contraction of –3.3 per cent in 2020.
The IMF said that the contraction for 2020 was 1.1 percentage points smaller than projected in the October 2020 WEO.
This, it said reflected the higher-than-expected growth outturns in the second half of the year for most regions after lockdowns were eased and as economies adapted to new ways of working.
“The projections for 2021 and 2022 are 0.8 percentage point and 0.2 percentage point stronger than in the October 2020 WEO, reflecting additional fiscal support in a few large economies and the anticipated vaccine-powered recovery in the second half of the year.
“Global growth is expected to moderate to 3.3 per cent over the medium term, reflecting projected damage to supply potential and forces that predate the pandemic, including aging-related slower labour force growth in advanced economies and some emerging market economies.
“Thanks to unprecedented policy response, the COVID-19 recession is likely to leave smaller scars than the 2008 global financial crisis.”
The report said that the United States of America was expected to grow by 6.4 per cent and China by 8.4 per cent in 2021.
The report, however, said that emerging market economies and low-income developing countries had been hit harder and were expected to suffer more significant medium-term losses.
For Sub-Saharan Africa, growth was estimated at 3.4 per cent, with South Africa at 3.1 per cent and Nigeria at 2.4 per cent.
The IMF said that there were divergent impacts with output losses particularly large for countries that relied on tourism and commodity exports and for those with limited policy space to respond.
It added that many of the countries entered the crisis in a precarious fiscal situation and with less capacity to mount major health care policy responses or support livelihoods.
According to the report, the projected recovery follows a severe contraction that has had particular adverse employment and earnings impacts on certain groups.