The global economy is recovering from the coronavirus pandemic, but the International Monetary Fund to warn of a recovery is mixed and fragile
- The global watchdog is set to up its forecasts for economic growth following the successful rollout of Covid vaccines in countries like the UK and the US
- The fund will also state that President Biden’s £ 1.4 trillion US stimulus package has improved prospects for global growth
- But it will warn that recovery in parts of the world – including Europe – is being held back by stalled vaccination programs and rising infection rates
The global economy is recovering from the pandemic, but the recovery is uneven and fragile, the International Monetary Fund will warn this week.
During the spring meeting via videolink, the global watchdog will raise its forecasts for economic growth after the successful rollout of Covid vaccines in countries like the UK and US.
The fund will also state that President Biden’s £ 1.4 trillion US stimulus package has improved prospects for global growth.
Weathering the storm: The IMF will warn that recovery in parts of the world will be slowed by stalled vaccination programs and rising infection rates
But it will warn that recovery in parts of the world – including Europe – is being held back by stalled vaccination programs and rising infection rates. And it will raise concerns that developing countries will be left behind in the vaccination program.
IMF executive director Kristalina Georgieva said ahead of the meeting last week: “The good news is that the world economy is on firmer foundations. Millions of people benefit from vaccines. But there is also danger.
‘Economic fate is falling apart. Vaccines are not available everywhere. Too many people face job losses and increasing poverty.
‘Too many countries are falling behind. We must not let our guard down. ‘
In its latest economic update in January, the IMF forecast global growth of 5.5 percent this year and 4.2 percent in 2022. These are expected to improve when the fund releases its global economic outlook tomorrow.
The IMF will also increase its forecast for US growth from 5.1 percent this year and 2.5 percent next year. Biden’s stimulus package, worth 8.5 percent of national income, should get the US economy going.
Boris Johnson and Rishi Sunak hope for good news on the UK outlook. In January, the IMF forecast Great Britain growth of 4.5 percent this year and 5 percent next year. The UK Office for Budgetary Responsibility is less confident this year, forecasting 4 percent growth, but 722 percent in 2022.
And European leaders will be excited to hear the IMF’s verdict on the continent. “One of the greatest dangers is the high level of uncertainty,” said Georgieva.
“So much depends on how the pandemic unfolds – which is now marked by uneven progress in vaccination and the new strains of the virus that are holding back growth, particularly in Europe and Latin America.”