Countries all over the world are trying to adapt to the ever-changing environment. There are many developing countries around the globe. The coronavirus pandemic created a lot of problems for developed as well as developing countries. On Tuesday, the International Monetary Fund (IMF) published its latest World Economic Outlook. It is worth noting that the IMF changed its position regarding the global economy.
Importantly, the organization now expects the global economy to grow 5.5% in 2021, a 0.3 percentage point increase from October’s forecasts. People should take into account that the International Monetary Fund expects global GDP (gross domestic product) to expand by 4.2% in 2022.
However, there are a number of challenges. For example, the coronavirus vaccine and its availability have the potential to affect economic recovery. Importantly, there are many uncertainties and it won’t be easy to reach positive results for every country.
Unfortunately, the world has seen surging numbers of coronavirus cases over the past few months. New variants of the coronavirus complicated the situation. Many countries tried to limit the spread of the variants by imposing restrictions. These restrictions however created a lot of problems for the companies.
It is worth noting that, the IMF cut its GDP forecasts for the eurozone this year by 1 percentage point. It makes sense as the coronavirus affected the eurozone. According to the latest information, it is now likely to grow by 4.2% in 2021. People should keep in mind that Germany, France, Italy, and Spain also saw their growth expectations cut for 2021. As a reminder, the countries mentioned above have the largest economies in the eurozone.
International Monetary Fund’s GDP Forecast
Based on the information provided by the IMF, it does not expect the euro area economy to return to the end-of-2019 levels before the end of 2022.
Interestingly, the U.S. is set to grow more than expected in 2021. Importantly, the International Monetary Fund revised its GDP forecast upward 2 percentage points thanks to strong momentum in the second part of 2020 as well as additional fiscal support. It is worth mentioning that GDP is now at 5.1% this year.
Another major economy is set to grow more than 8% in 2021, according to the IMF. This information underlines the strength of China.
Last but not least, the International Monetary Fund reiterated that the governments will need to keep supporting their economies by means of fiscal stimulus to bolster economic recovery.