The International Monetary Fund has said there are emerging signs of a stronger global economic recovery. The organisation has, however, cautioned that the emergence of coronavirus variants means that there are still significant risks to the world economy’s growth.
IMF First Deputy Managing Director Geoffrey Okamoto gave a speech at the China Development Forum, where he raised concerns about the wide gap between advanced economies and emerging markets. He also said that 90 million people have fallen below the extreme poverty line since the pandemic began. According to Okamoto, China is back to pre-pandemic growth levels.
More people are expected to face poverty as the cumulative income has been severely affected due to the pandemic, and is 22% lower than it would otherwise have been.
What’s the World Bank saying
The World Bank released a report titled, ‘Global Economic Prospects, January 2021’ which predicted economic repair and growth for most countries in 2021, but at a slower pace than usual. The global economy contracted by 4.3% in 2020, representing the fourth most severe global recession in the past 150 years. For 2021, the global growth is projected at 4%.
Interestingly while the report did mention that vaccine inoculation rate, and a rise in infections around the world could severely affect the growth numbers, it also mentioned that economists were already identifying structural weaknesses in growth and didn’t have positive economic expectations.