Although the global economic recovery is continuing, the fault lines exposed by the coronavirus disease (Covid-19) pandemic appear to be “more persistent,” according to the International Monetary Fund (IMF)
The persistent impact of the Covid-19 pandemic, as well as the failure to provide vaccines globally, is widening the economic difference and dimming the prospects for developing countries, according to the IMF. Global economic growth is predicted to continue this year and next as the recovery broadens, but the aggregate figures conceal substantial downgrades and continued challenges in individual countries. “Due to worsening pandemic dynamics, the outlook for the low-income developing country group has dimmed significantly,” said IMF chief economist Gita Gopinath.
The setbacks, which she blamed on the “great vaccine divide,” will have an influence on the recovery of living standards, and she warned that a prolonged pandemic “may lower global GDP by $5.3 trillion over the next five years.” Meanwhile, industrialised economies have “poor near-term prospects…in part due to supply interruptions,” according to the World Bank. According to the International Monetary Fund’s current World Economic Outlook, this threatens to drive prices higher, particularly in the United States, where growth this year will be weaker than previously expected, even when big expenditure bills are factored in.
Global output is likely to expand 5.9% this year, slightly less than the July forecast, before decreasing to 4.9 percent in 2022, according to the research. However, a surge of infections caused by the Delta variety of Covid-19, as well as a significantly lower vaccination rate in developing countries and supply shortages, have hindered or delayed recovery in many economies. In a blog post about the updated forecasts, Gopinath noted, “The worrisome gap in economic prospects across countries remains a serious concern.” She predicted that advanced economies will revert to their “pre-pandemic trend line” in 2022, and then outperform it by 0.9 percent in 2024.
The world’s greatest economy has benefited from huge fiscal stimulus, but the Delta wave has slowed momentum, and the IMF cut the US growth prediction for this year to 6%, down from 7% in July.