The International Monetary Fund (IMF) on Tuesday announced their latest projections for global economic growth in 2021. The IMF decided to raise their projections by 2021 as it is believed this year will be less affected by 2020.
According to the IMF several countries have agreed to use and distribute vaccines in December. This has raised hopes that pandemics that infect nearly 100 million people and claim more than 2.1 million worldwide could be reduced.
Nevertheless, the IMF warned that the world economy continued to face 'uncertainty' and a new wave of Covidi-19 infection. The discovery of the Covid-19 variant adds to the risk. Factors like these make the IMF expect global activity this year to remain under pre-Covid-19 projections.
On the other hand, almost 90 million people are likely to fall below the ‘extreme’ poverty threshold in 2020-2021. Efforts to reduce poverty over the last two decades have been thwarted following the impact of Covid-19.
In a recent report, the IMF predicted a global contraction in 2020 of 3.5%, up 0.9% from the October forecast which expects a contraction of 4.4%. This reflects stronger momentum in the second half of 2020.
For 2021, the IMF predicts the economy will grow by 5.5% following the distribution of vaccines and stimulus packages introduced mainly from the United States and Japan. The forecast is likely to increase further if the U.S. Congress approved a $ 1.9 trillion aid package proposed by President Joe Biden.
For example, the IMF called on countries to continue to support their economies until economic activity returns to normal.
