IMF: Recovery from coronavirus will be fragile and uneven
The global economy is bouncing back from the pandemic but the recovery is uneven and fragile, the International Monetary Fund will warn this week.
As it holds its spring meetings by video link, the global watchdog will raise its forecasts for economic growth after the successful rollout of Covid vaccines in countries such as the UK and US.
The Fund will also declare that President Biden’s £1.4trillion US economic stimulus package has boosted the outlook for global growth.
Weathering the storm: The IMF will warn the recovery in parts of the world is being held back by faltering vaccination programmes and rising infection rates
But it will warn the recovery in parts of the world – including Europe – is being held back by faltering vaccination programmes and rising infection rates. And it will voice concerns that the developing world is being left behind in the vaccination programme.
Speaking last week ahead of the meetings, IMF managing director Kristalina Georgieva said: ‘The good news is that the global economy is on firmer footing. Millions of people are benefiting from vaccines. But there is danger as well.
‘Economic fortunes are diverging. Vaccines are not available everywhere. Too many people face job losses and rising 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 per cent this year and 4.2 per cent in 2022. These are likely to be upgraded when the fund publishes its World Economic Outlook tomorrow.
The IMF is also set to raise its forecasts for US growth from 5.1 per cent this year and 2.5 per cent next year. Biden’s stimulus package worth 8.5 per cent of national income is expected to turbocharge the US economy.
Boris Johnson and Rishi Sunak will be hoping for good news on the outlook for the UK. In January, the IMF forecast UK growth of 4.5 per cent this year and 5 per cent next year. Britain’s Office for Budget Responsibility is less confident about this year, forecasting 4 per cent growth, but 7.3 per cent in 2022.
And European leaders will be anxious to hear the IMF’s verdict on the Continent. ‘One of the greatest dangers is high uncertainty,’ said Georgieva.
‘So much depends on the path of the pandemic – which is now shaped by uneven progress in vaccination and the new virus strains that are holding back growth, especially in Europe and Latin America.’