IMF lifts global growth forecasts amid increased vaccine rollouts, US stimulus

Warns about widening inequality

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  • IMF expects the world economy to grow by 6% in 2021
  • Sub-Saharan Africa growth expected to rebound to 3.4 percent in 2021
  • Warns of increase in inequality

The International Monetary Fund (IMF) on Tuesday raised its global economic outlook, driven by the latest round of fiscal stimulus in the United States (US) and the vaccine rollouts across the world.

In its second economic growth forecast in a space of three months, IMF expects the world economy to grow by 6% in 2021, up from its 5.5% forecast in January 2021.

Looking further ahead, global GDP for 2022 is seen increasing by 4.4%, higher than an earlier estimate of 4.2%.

“Even with high uncertainty about the path of the pandemic, a way out of this health and economic crisis is increasingly visible,” IMF chief economist Gita Gopinath said in the latest World Economic Outlook report.

The organisation’s forecast for emerging and developing economies’ growth is 6.7% for 2021, with South Africa expected to grow at 3.1% this year, up from a revised 2.8% forecast in January.

In Sub-Saharan Africa, the IMF said growth was expected to rebound to 3.4 percent in 2021, significantly lower than the trend anticipated before the pandemic following the largest contraction ever for the region.

With tourism activities still subdued amid global travel restrictions, economies that largely depend on tourism will most likely see slow growth.

Meantime, the group estimated growth of 5.1% for advanced economies this year, with the United States expanding by 6.4%.

IMF warned of an increase within-country inequality as young workers and those with relatively lower skills remain more heavily affected in not only advanced but also emerging markets and developing economies.

Gopinath added that lower levels of female employment was also exacerbating disparities.

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