The global economy shows a faster recovery in growth than previously expected. However, significant risks remain, including new strains of coronavirus. This was stated by the International Monetary Fund (IMF) deputy head, Jeffrey Okamoto.
In January, we forecasted that the global market would increase by 5.5% in 2021. However, there are prospects for a faster recovery thanks to additional fiscal stimulus, especially in the US, and the prospects for larger vaccinations," said Okamoto, stressing that the corresponding changes will be made in the Fund's April report on the outlook for the global economy. The IMF press office released on Saturday the text of Okamoto's speech at the China Development Forum 2021.
However, the global economy's recovery was incomplete and uneven," continued the deputy head of the organization. It's incomplete because, despite the projected recovery in the second half of 2020, GDP has remained less than the pre-crisis level in most countries.
He believes that China has done its best to a great extent and is returning to the pre-crisis stage of development and overruns all major economies.
Poverty and Recovery Challenges
According to Okamoto, "outside of China, there are worrying signs that the gap between developed and emerging economies is widening." We project that total per capita income in emerging market economies and developing countries, excluding China, will be 22% lower between 2020 and 2022 than it would have been without a pandemic," he stated. Such conditions, continued the deputy head of the fund, will lead to the fact that "since the beginning of the pandemic, almost 90 million people will find themselves below the line of extreme poverty."
As Okamoto stressed, the uncertainty about the economic recovery is extremely great." We don't know how long the health crisis will last.
He said access to vaccines is highly uneven in both developed and emerging countries.
For example, in low-income countries, the start of large-scale vaccinations may be delayed until 2022. "This is the problem. This pandemic will truly end only when it is over for all. Another risk is the spread of drug-resistant mutations that threaten to reduce the effectiveness of existing vaccines and can undermine or slow down the recovery process," explained the deputy head of the fund.