LONDON — The International Monetary Fund is expecting a stronger economic recovery in 2021 as Covid-19 vaccine rollouts get underway, but it warns of “daunting challenges” given the different rates of administering shots across the globe.
The organization said Tuesday it expects the world economy to grow by 6% in 2021, up from its 5.5% forecast in January. Looking further ahead, global GDP for 2022 is seen increasing by 4.4%, higher than an earlier estimate of 4.2%.
“Even with high uncertainty about the path of the pandemic, a way out of this health and economic crisis is increasingly visible,” IMF chief economist Gita Gopinath said in the latest World Economic Outlook report.
The latest round of fiscal stimulus in the U.S., along with the vaccine rollouts across the world, have made the group more confident about the global economy this year.
Within-country income inequality will likely increase because young workers and those with relatively lower skills remain more heavily affected in not only advanced but also emerging markets and developing economies.
IMF chief economist
“Nonetheless, the outlook presents daunting challenges related to divergences in the speed of recovery both across and within countries and the potential for persistent economic damage from the crisis,” Gopinath added.
The IMF estimated growth of 5.1% for advanced economies this year, with the United States expanding by 6.4%.