The Fund said in its latest World Economic Outlook (WEO) update released Tuesday that the 2021 global forecast is unchanged from the previous WEO but with "offsetting revisions," indicating that "prospects for emerging market and developing economies have been marked down for 202.
By contrast, the forecast for advanced economies is revised up, as these revisions reflect "pandemic developments and changes in policy support." On the 0.5 percentage-point upgrade for 2022, it said it derives largely from the forecast upgrade for advanced economies, particularly the United States, reflecting the anticipated legislation of additional fiscal support in the second half of 2021 and improved health metrics more broadly across the group, according to the IMF.
"Inflation is expected to return to its pre-pandemic ranges in most countries in 2022 once these disturbances work their way through prices, though "uncertainty remains high," it noted, adding that "elevated inflation is also expected in some emerging market and developing economies, related in part to high food prices."
It pointed to a risk that transitory pressures could become more persistent and central banks may need to take preemptive action, saying that "risks around the global baseline are to the downside. Slower-than-anticipated vaccine rollout would allow the virus to mutate further, with IMF Chief Economist Gita Gopinath saying "more persistent supply disruptions and sharply rising housing prices are some of the factors that could lead to persistently high inflation." The IMFآ‘s projects advanced economies to grow 5.6 percent this year and for emerging market and developing countries to 6.3 percent, with growth projections for Middle East and Central Asia at 4.0 in 2021 and 3.7 in 2022.
"Vaccine access has emerged as the principal fault line along which the global recovery splits into two blocs: those that can look forward to further normalization of activity later this year (almost all advanced economies) and those that will still face resurgent infections and rising COVID death tolls," the IMF stressed.
For an optimal experience, please
