IMF revises global economic growth projection

The global economy is projected to grow at 6 percent this year, moderating to 4.4 percent in 2022 after a contraction of –3.3 percent in 2020

The revised 6 percent growth projection follows an earlier growth projection of 5.5 percent by the IMF.

According to the IMF, the contraction of the global economy for 2020 was 1.1 percentage points smaller than projected, reflecting the higher-than-expected growth outturns in the second half of 2020 for most regions after lockdowns were eased and as economies adapted to new ways of working.

 The IMF’s projections for 2021 and 2022 are 0.8 percentage points and 0.2 percentage points stronger and reflects additional fiscal support in a few large economies and the anticipated vaccine-powered recovery in the second half of 2021.

“Global growth is expected to moderate to 3.3 percent over the medium term—reflecting projected damage to supply potential and forces that predate the pandemic, including aging-related slower labour force growth in advanced economies and some emerging market economies,” said the report.

In the report, the IMF asserts that the contraction experienced in the global economy last year, could have been 3 times larger if not for quick policy support by world governments.

“High uncertainty surrounds the global economic outlook, primarily related to the path of the pandemic. The contraction of activity in 2020 was unprecedented in living memory in its speed and synchronized nature. But it could have been a lot worse, the contraction could have been three times as large if not for extraordinary policy support,” read the report.