The International Monetary Fund (IMF) has upgraded its global growth projections, forecasting a 6 percent rebound in the world economy in 2021 and 4.4 percent in 2022, while also warning that recoveries are at risk of diverging dangerously. IMF Chief Economist Gita Gopinath at a virtual conference introducing the April 2021 World Economic Outlook said that “The pandemic is yet to be defeated, and virus cases are accelerating in many countries,”. The global economy contracted by 3.3 percent in 2020 after countries rich, poor, big, and small implemented restrictions and lockdowns to halt the spread of the deadly coronavirus. IMF forecasts a better year for global economic growth mainly driven by a sizable recovery in the United States, where the IMF estimates the economy will grow 6.4 percent this year. The eurozone is also seen rebounding this year albeit at a slower pace of 4.4 percent, while China’s economy is projected to grow by 8.4 percent. The average annual loss in per capita gross domestic product (GDP) over 2020 to 2024 is projected to be 5.7 percent in low-income countries, and 4.7 percent in emerging markets. The losses in advanced economies are expected to be smaller, at 2.3 percent. Young, low-skilled workers and women remain more heavily affected by the pandemic’s economic wrath and many of the jobs they and others lost are unlikely to return.
Still, the IMF said the worst has been avoided thanks to swift policy action worldwide including $16 trillion in fiscal support. According to IMF, Once governments get COVID-19 under control, they should focus on building inclusive economies by prioritizing green infrastructure investment to help mitigate climate change and strengthening social assistance to arrest rising inequality. Financing these goals will be challenging for economies with limited fiscal space. Bridging the funding gap will require improving tax collection and eliminating wasteful expenses. The only way forward is the implementation of pragmatic policies to ease the life of common citizens and marginalized communities.