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October 12, 2021
IMF announces its World Economic Outlook October 2021 Forecast
Photo: International Monetary Fund World Economic Outlook. Chief Economist Gita Gopinath, Division Chief in the IMF Research Department, prepares to provide the World Economic Outlook during the 2021 Annual Meetings at the International Monetary Fund. October 12, 2021. Washington, DC, United States. IMF Photo/Joshua Roberts.
Washington, DC. October 12, 2021 —The IMF is lowering its global growth projection for 2021 slightly to 5.9 percent while keeping it unchanged for 2022 at 4.9 percent. However, this modest headline revision masks significant downgrades for some countries, the Fund reports in its World Economic Outlook released Tuesday (October 12) in Washington, DC.
“The global recovery continues, but momentum has weakened, hobbled by the pandemic. As a result, we have a slight downward revision for global growth for this year to 5.9 percent for next year. Our projection remains unchanged at 4.9 percent. However, the divergences in growth prospects across countries persist and remain a major concern,” said Gita Gopinath, Economic Counsellor and Director of the Research Department at the International Monetary Fund.
Gopinath added that risks to economic prospects have increased, and policy trade-offs have become more complex in the ongoing Covid-19 pandemic. As a result, monetary policy will need to walk a fine line between tackling inflation and financial risks and supporting economic recovery.
“One of the major risks remains that there could be new variants of the virus that could further slow back the recovery. In addition, we’re seeing major supply disruptions worldwide that are also feeding inflationary pressures, which are quite high. Further, financial risk-taking also is increasing, which poses an additional risk to the outlook,” explained Gopinath.
The dangerous divergence in economic prospects across countries remains a significant concern. These divergences are a consequence of the ‘great vaccine divide’ and large disparities in policy support.
“The foremost priority is to vaccinate the world. Much greater multilateral action is needed to vaccinate at least 40 percent of the population in every country by the end of this year. And 70 percent by the middle of next year. We also need much greater action to address climate change. Individual countries will need to tailor their fiscal and monetary policy to the country’s specific conditions, to the health conditions in their country, to their economic conditions, while also maintaining the credibility of their fiscal and monetary frameworks,” said Gopinath.
Source: IMF
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Edited & Posted by the Editor | 3:13 PM | Link to this Post
