The International Monetary Fund (IMF) on Tuesday (April 6) raised its forecast for global growth in 2021 to 6 percent, an increase of 0.5 percentage points from the 5.5 percent growth forecast the institution issued in January of this year.
The IMF also increased its forecast for 2022 global growth, lifting it to 4.4 percent year over year from 4.2 percent.
The forecasts are contained in the April edition of the IMF’s Word Economic Outlook report. The IMF usually publishes the report twice a year, in the spring and the fall.
Explaining the change in growth prediction, IMF staff wrote on its website: “The upward revision reflects additional fiscal support in a few large economies, the anticipated vaccine-powered recovery in the second half of 2021, and continued adaptation of economic activity to subdued mobility.”
But IMF economists cautioned, “High uncertainty surrounds this outlook, related to the path of the pandemic, the effectiveness of policy support to provide a bridge to vaccine-powered normalization, and the evolution of financial conditions.”
Materials accompanying the report noted, “The outlook depends not just on the outcome of the battle between the virus and vaccines — it also hinges on how effectively economic policies deployed under high uncertainty can limit lasting damage from this unprecedented crisis.”
The report itself cautions, “New virus mutations and the accumulating human toll raise concerns, even as growing vaccine coverage lifts sentiment. Economic recoveries are diverging across countries and sectors, reflecting variation in pandemic-induced disruptions and the extent of policy support.”
In its report, the IMF predicts U.S. growth will hit 6.4 percent in 2021 and 3.6 percent in 2022, matched for 2021 among developed countries only by Spain.
The fastest growth the IFM predicts for all countries is India’s, which the agency’s economists peg at 12.5 percent for 2021 and 6.9 percent in 2022.
The slowest growth predicted among the several dozen countries specified is Nigeria’s, at 2.5 percent in 2021 and 2.3 percent in 2022.
Selected by EFXA