| World Bank IMF and Dev Agencies |    1327 VIEWS  |
| World Bank IMF and Dev Agencies | |
| 1327 VIEWS | |
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Wednesday, January 27,
2020 / 08:30 AM / by IMF / Header Image Credit: IMF
Although recent vaccine approvals have
raised hopes of a turnaround in the pandemic later this year, renewed waves and
new variants of the virus pose concerns for the outlook. Amid exceptional
uncertainty, the global economy is projected to grow 5.5 percent in 2021 and
4.2 percent in 2022. The 2021 forecast is revised up 0.3 percentage point
relative to the previous forecast, reflecting expectations of a vaccine-powered
strengthening of activity later in the year and additional policy support in a
few large economies.
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 global growth contraction for 2020 is estimated
at -3.5 percent, 0.9 percentage point higher than projected in the previous
forecast (reflecting stronger-than-expected momentum in the second half of
2020).
Policy actions should ensure effective
support until the recovery is firmly underway, with an emphasis on advancing
key imperatives of raising potential output, ensuring participatory growth that
benefits all, and accelerating the transition to lower carbon dependence. As
noted in the October 2020 World Economic Outlook (WEO), a green investment push
coupled with initially moderate but steadily rising carbon prices would yield
needed emissions reductions while supporting the recovery from the pandemic recession.
Strong multilateral cooperation is required to bring the pandemic under control everywhere. 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. Many countries, particularly low-income developing economies, entered the crisis with high debt that is set to rise further during the pandemic. The global community will need to continue working closely to ensure adequate access to international liquidity for these countries. Where sovereign debt is unsustainable, eligible countries should work with creditors to restructure their debt under the Common Framework agreed by the G20.
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