In 2022, the International Monetary Fund expects growth of 4.2%.
The International Monetary Fund (IMF) has improved its forecast for global GDP growth this year by 0.3 percentage points (p.p.) compared to its October estimates. This follows from the IMF’s January report on the global economic outlook, released on Tuesday.
According to analysts of the fund, this year, the growth rate of global GDP will be 5.5%; in the October forecast, this figure was 5.2%. In 2022, the IMF expects growth of 4.2%. Last year, according to the fund’s analysts, the world economy shrank by 3.5%, while in the fall, experts expected that by the end of 2020, world GDP would fall by 4.4%.
“This reflects a more confident attitude…> regional average [economic] recovery in the second half of 2020. The upward revision of the 2021 forecast by 0.3 percentage points reflects additional support measures in several major economies and expectations of strengthening [economic] activity later this year in connection with vaccination,” the report explains.
According to the forecasts of the fund’s experts, the volume of world trade will increase by 8.1% this year and by 6.3% in 2022. Most countries are also expected to reduce the level of budget deficits, driven by rising government revenues and spending cuts as economic activity recovers.
At the same time, the document notes that in general, the approval of coronavirus vaccines by the country’s regulators “gives hope” for overcoming the pandemic, but “new waves [of infection] and new variants of the virus cause concerns” from the point of view of economic forecasts. “There is a lot of uncertainty surrounding this forecast. Greater success with vaccination and treatment methods and additional [economic] support measures can improve outcomes. In contrast, slow [rates] of vaccination, virus mutation and premature withdrawal of support measures can worsen outcomes,” said Gita Gopinath, chief economist at the IMF, in a blog post published on the fund’s website on Tuesday.
IMF analysts note that the pace of economic recovery in different countries will differ depending on some factors, including the situation with the pandemic and the consequences that it has had on the economy of each country.
Thus, the GDP growth rate of advanced economies in the current year is expected to be 4.3% (an improvement of 0.4 percentage points compared to the October forecast), and in 2022 – 3.1%. In particular, the US economy is estimated to expand by 5.1% in 2021 (an improvement of 2 percentage points from the October forecast) and 2.5% in 2022, after shrinking by 3.4% in 2020. Simultaneously, economic activity in the United States and Japan in the second half of 2021 is projected to reach the level that preceded the pandemic. The forecast for the growth of the eurozone economy in 2021 was revised downwards – from 5.2% to 4.2%. According to experts, the GDP of European countries will increase by 3.6% next year; the fall in the GDP of the eurozone in 2020, according to estimates, was 7.2%.
GDP growth in emerging markets and developing countries is expected to reach 6.3% in 2021 (an improvement of 0.3 percentage points from the October forecast) and 5% in 2022. In this group, experts expect the largest GDP growth in 2021 in India – by 11.5%. The growth rate of China’s GDP, according to the fund, will be 8.1% in 2021 (a deterioration of 0.1 percentage points compared to the October forecast), in 2022 – 5.6%. In 2020, China’s GDP was estimated to have increased by 2.3%.