The discovery and distribution of Covid -19 vaccines will power a stronger global economic recovery in 2021, the International Monetary Fund (IMF) forecast Tuesday.
The global economic growth, which last year sunk 3.5 per cent, worst levels in decades on coronavirus menace is expected to rebound 5.5 per cent this year.
The new figure for 2021 is a 30basis point upgrade from the 5.2 per cent expansion the lender projected in October and would mark the fastest year of global growth since the 2010 comeback from the financial crisis.
“The vaccines should contain the spread of the virus and allow governments around the world to ease lockdowns and encourage a return to normal economic activity,’’ IMF said.
Even so, the lender says that economies worldwide will need support from their governments to offset the damage from the pandemic, warning that coronavirus mutations could cloud the outlook for global health and economic growth.
According to the report, Sub Saharan Africa’s economy, which shrunk 2.6 per cent in October, is expected to register a growth of 3.2 per cent.
Nigeria and South Africa, two leading economies in the continent are expected to grow 1.5 and 2.8 per cent compared to negative 3.2 and 7.5 per cent last year.
IMF said that it expects the U.S. economy — the world’s biggest — to expand 5.1 per cent this year after collapsing 3.4 per cent in 2020 while China’s is expected to record the highest growth of 8.1 per cent after eking out a 2.3 per cent increase in 2020.
Despite positive growth, IMF says economic activities are expected to remain well below pre-pandemic levels.
“Even with the anticipated recovery in 2021-22, output gaps are not expected to close until after 2022,” the IMF report says.
However, economic activity remains well below pre-pandemic levels. “Even with the anticipated recovery in 2021-22, output gaps are not expected to close until after 2022.