IMF expects global economy to grow 5.5pc, with SA expanding 2.8pc this year because of vaccines
JOHANNESBURG - The International Monetary Fund (IMF) expects global growth to rebound to 5.5 percent in 2021, on the rollout of Covid-19 vaccines and further policy support in large economies.
The IMF on Tuesday released its revised growth projections for 2020 and
2021. It noted that renewed waves and new variants of the coronavirus still pose risks to the outlook.
“Amid exceptional uncertainty, the global economy is projected to grow 5.5 percent in 2021 and 4.2 percent in 2022,” the report read. The 2021 growth forecast is revised upwards from 5.2 percent reported in October 2020. The global contraction of -3.5 percent for 2020 is less severe than the -4.4 percent projected previously. “The projected growth recovery this year follows a severe collapse in 2020 that has had acute adverse impacts on women, youth, the poor, the informally employed, and those who work in contact-intensive sectors,” the report read.
“The strength of the recovery is projected to vary significantly across countries, depending on access to medical interventions, effectiveness of policy support, exposure to cross-country spillovers, and structural characteristics entering the crisis,” the IMF added. Domestically, the IMF expects the SA economy have contracted by 7.5 percent in 2020, compared to the -8 percent it pencilled in previously. SA’s Reserve Bank similarly revised down its forecast from –eight percent to -7.1 percent last week. The country is expected to rebound with growth of 2.8 percent, slightly lower than the three percent the IMF previously forecasted.
The Sub-Saharan African region is expected to contract by -2.6 percent in 2020 and rebound with growth of 3.2 percent in 2021.
The IMF emphasised the need for cooperation to bring the pandemic under control. “Such efforts include bolstering funding for the Covax facility to accelerate access to vaccines for all countries, ensuring universal distribution of vaccines, and facilitating access to therapeutics at affordable prices for all,” the report read. – FIN24.