Rosy on economic recovery . . .
The International Monetary Fund (IMF) released its latest World Economic Outlook (WEO) report on Tuesday, forecasting six per cent growth in the world economy in 2021 – compared to the 5.5 per cent growth it predicted in January. The WEO report further predicts that the world economy will grow 4.4 per cent in 2022, an increase from its initial 4.2 per cent growth forecast. The stronger growth prediction is due primarily to the increase in vaccine roll-outs, which is expected to fuel recoveries. The chief economist for IMF, Gita Gopinath, said that “even with high uncertainty about the path of the pandemic, a way out of this health and economic crisis is increasingly visible.”
India and China lead the way in Asia . . .
Looking at the growth rates of emerging and developing economies, China and India are expected to lead the way. China’s economy is predicted to grow by 8.4 per cent in 2021, and India’s by 12.5 per cent. However, neither country is out of the woods just yet. India’s current rise in COVID-19 case counts is concerning, and some experts are worried about China’s increase in debt and decrease in private consumption. Even considering those risks, the economic outlook for the region seems positive. The economies of emerging and developing Asia are collectively expected to grow by 8.6 per cent in 2021, and ASEAN member economies are projected to grow 4.9 per cent.
Concerns about diverging recoveries . . .
Despite the overall positive economic outlook, the WEO report cautions that economic growth might be uneven – both between economies and within individual countries. Between countries, there are concerns over unequal vaccine roll-outs. Wealthy countries like the U.K. and the U.S. pre-purchased many vaccine doses and are well on the way with their roll-outs. But many Asian countries have vaccinated less than 3 per cent of their populations. The IMF states that income inequality is likely to increase within individual countries, with young workers, low-skilled workers, and women being adversely affected. Despite an overall positive economic outlook, there is still work to be done on behalf of all countries to ensure an equal and inclusive economic recovery.