IMF projects global economy to grow at 6% in 2021

Thursday April 08 2021
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Gita Gopinath presents the IMF’s 2020 World Economic Outlook in April 2020. IMF Photo

By MARTIN LUTHER OKETCH

The International Monetary Fund (IMF) has said global economies will benefit from a stable growth projected at 6 per cent in 2021.
 
The growth, the IMF said, is the highest in more than 10 years and is expected to help countries that are experiencing disruptions to recover.
 
Speaking during the release of the World Economic Outlook on Tuesday, Dr Gita Gopinath, the IMF economic counsellor and director of research, said: “We are now projecting a stronger recovery in 2021 and 2022 for the global economy with growth projected to be at 6 per cent in 2021 and 4.4 per cent in 2022.”

Nonetheless, IMF said, whereas the projections look impressive, the outlook presents daunting challenges related to divergences in the speed of recovery for countries across the globe.

Dr Gita also noted that growth during the period will mostly be felt in advanced economies, particularly US, which is expected to grow at 6.4 per cent this year.

Sub Saharan Africa in which Uganda falls, Dr Gita said, is expected to recover from a contractions of - 1.9 per cent in 2020 to grow by 3.4 per cent in 2021.

However, the growth will be significantly lower than the 5 per cent pre-Covid-19 period with the recovery expected to be tailored on policy responses in regard to vaccination, strength of recovery and structural characteristics of the economy.

 “While Covid-19 continues, policies should first focus on escaping the crisis, prioritising health care spending, providing well-targeted fiscal support, and maintaining accommodative monetary policy while monitoring financial stability risks,” Dr Gita said.

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The IMF also noted that low-income economies are expected to benefit from an extend pause on debt repayments under the debt service suspension initiative and operationalising the G20 common framework for orderly debt restructuring.

Uganda is among the countries that have asked for suspension of debt repayment under the G20 debt restructuring and has already benefited from the IMF special drawing rights.

moketch@ug.nationmedia.com

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