The International Monetary Fund (IMF) expects the economic recovery to be faster in 2021 as the distribution of the Covid-19 vaccine is intensified. However, the IMF warns that more difficult challenges await as dosing varies around the world.
On Tuesday, the organization said it expects the world economy to grow 6% in 2021, up from a 5.5% forecast in January. For 2022, global GDP will grow by 4.4%, higher than the previous estimate of 4.2%.
According to the IMF chief economist, Gita Gopinath, ‘although the direction of the pandemic is still uncertain, the way out of this health and economic crisis is becoming clearer’.
The latest fiscal stimulus announced in the U.S., along with the distribution of vaccines around the world, made the IMF more confident in the global economy this year. However, there are concerns about the recovery rate of the Covid-19 pandemic worldwide and its impact on the economy.
The IMF estimates 5.1% growth for advanced economies this year, with the United States growing by 6.4%. Meanwhile, the country’s economy is growing at 6.7% for 2021.
Gopinath added, the income gap in the country is likely to increase as young workers and those with lower skills will be affected.
For example, the IMF suggests that national administrators are more focused on tackling the crisis by providing fiscal support and health care.
