Most advanced economies will be plagued by the coronavirus, with little sustained damage due to the relatively rapid launch of vaccines and their willingness to rapidly increase public spending and borrowing, according to the IMF.
However, the likely success in addressing the economic impacts of the pandemic will not be repeated in emerging economies, however, highlighting the differences in economic prosperity.
Even with different fates But the global economic outlook has improved markedly since the fund’s earlier forecast earlier this year said on Tuesday, adjusting higher expectations for nearly every country.
The global economy is projected to grow at a rapid pace for two years in 2021and 2022 at 6 percent and 4.4 percent, as the IMF forecast. It also downgrades the estimated size of global output contractions caused by the spread. Outbreak of the epidemic last year.
The fund’s projections suggest that the economic legacy of the epidemic will be nothing like the 2008-2009 financial crisis, which left countries with a hangover from weak growth a decade later.
By 2024, advanced economies would produce about 1 percent less output than their pre-epidemic growth paths, according to IMF estimates.On the other hand, after the 2008-2009 recession, they had a more than 10 percent gap.
Overall, the economic impact of the epidemic was “much less. [2008-09] The global financial crisis, ”said Gita Gopinath, the fund’s chief economist, added that the advanced economy“ is getting very little. [economic] Scars and [in] U.S. [there is] No scars effectively “.
The IMF raised its 2021 U.S. growth forecast, 1.3 percent from an earlier forecast in January. The Canadian forecast was up 1.4 percentage points, Italy up 1.2 percentage points and the United Kingdom up 0.8 percentage points.
The fund is particularly volatile on the prospect of a swift recovery in the United States without inflationary pressures. Gopinath said: “The US is the only country with a big economy. [economic output] For 2022, it is expected to be more than possible without this outbreak. ”
However, the IMF noted that the socio-economic pain of the crisis has hit some countries and that its domestic groups are more severe than some other countries in Europe that are experiencing another wave of the coronavirus. The outlook will take longer to recover, but the IMF is optimistic that the EU will follow other advanced economies like the United States in just a few years.
By 2024, the IMF expects that although many of these lagging European economies will almost revert to pre-epidemic growth.
This is mainly because advanced countries and their companies have proven to be more flexible in blocking than previously expected funds.
The IMF, on the other hand, expects the crisis to be a drag on emerging economies where economic output is expected to drop nearly 8% below the level expected by the IMF before the outbreak.
The countries most at risk of a sluggish recovery are emerging economies with little access to the Covid-19 vaccine, those with weak public finances and those who rely heavily on tourism, the IMF said.
The short-term impacts on emerging economies will include the disruption of studies during the outbreak that led to what the fund said was “the most vulnerable.” “Extreme tolls” for education in poorer countries because they have limited online education capabilities.
Gopinath said there was little reason for immediate concern about unprecedented levels of fiscal stimulus on both sides of the Atlantic that drive up inflation as forces around the world were promising. To close the price increase, and there is still no sign that the central bank or The government will lose control.
Rather, it underscores the risk that the United States may need to lead the world in rapid tightening of monetary policy if inflationary pressures rise sharply. This could seriously affect emerging markets by driving capital turnover back to developed countries.
However, there were no signs yet that US President Joe Biden’s 1.9-ton stimulus had destabilized the international market, Gopinath said, adding that it was an encouraging signal.