IMF Raises Global Economic Growth Forecast for 2021/22

The Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva said on Tuesday that the fund will raise its forecast for global economic growth in both 2021 and 2022, after contracting by 3.5% last year, stressing that financial conditions are still largely uncertain.

Georgieva emphasized that the fund will raise its January outlook for global economic growth by 5.5% in 2021 and 4.2% in 2022 due to increased fiscal spending in the U.S. and expectations of a vaccine-supported recovery in developed economies.

She said the global economy was on a more stable footing after governments spent nearly $16 trillion on fiscal measures to contain the pandemic and contain its economic impact, yet, developments perge dangerously across countries, and even within states.

"Vaccines are not available for everyone, everywhere. Too many countries are falling behind. I told the Council on Foreign Relations, ahead of the release of the updated World Economic Outlook, to be released next week," she added.

"The world is at a critical turning point, as it was in 1945 when the International Monetary Fund and the World Bank were created," she pointed out, calling for continued strong measures to intensify vaccinations, and invest green, and digital.

[caption id="attachment_226573" align="aligncenter" width="800"] IMF Managing Director Kristalina Georgieva presents the global economic outlook and discusses policy priorities with the Council on Foreign Relations ahead of the IMF/World Bank 2021 Spring Meetings[/caption]

"We are facing the biggest test of our generation. What we do now will shape the post-crisis world," she stressed.

Moreover, advanced economies are facing an 11% loss in per capita income, compared to pre-crisis levels, while emerging economies, excluding China, are expected to experience a 20% drop in income.

The International Monetary Fund has provided more than $107 billion in financing to 85 countries and debt servicing relief for 29 of the poorest countries. In sub-Saharan Africa, IMF financing has risen 13 times its average level in the past decade.

The managing director concluded that the uneven vaccination and the emergence of new strains hold back growth in both Europe and Latin America.