The International Monetary Fund (IMF) has projected that the spread of COVID-19 vaccines will power a stronger global economic growth of 5.5% in 2021.
After sinking 3.5% in 2020, the worst year since World War II, the global economy will grow 5.5% this year, the 190-country lending organization predicted.
The new figure for 2021 is an improvement on the 5.2% growth the IMF forecast in October and would mark the fastest year of global growth since the 2010 recovery from the global financial crisis.
The IMF posited that the vaccines should contain the spread of the virus and allow governments around the world to ease lockdowns and encourage a return to normal economic activity. The world economy also got a boost from government stimulus programs late last year in the United States and Japan.
However, the country lending organization notes that economies worldwide will need support from their governments to offset the damage from the pandemic and warns that coronavirus mutations could cloud the outlook for global health and economic growth.
“Much depends on the outcome of this race between a mutating virus and vaccines and the ability of policies to provide effective support until the pandemic ends,” IMF Chief Economist Gita Gopinath said at a press briefing. “There remains tremendous uncertainty.”
In an update to its World Economic Outlook, the IMF said that it expects the U.S. economy which is the world’s biggest to expand 5.1% this year after plunging 3.4% in 2020. The second largest economy, China is expected to record 8.1% growth after reporting a 2.3% increase in 2020.
The 19 countries European countries that share the euro currency will collectively register 4.2% growth this year after seeing economic output crater 7.2% in 2020, the IMF says. The Japanese economy is forecast to grow 3.1%, reversing a 5.1% decline in 2020.
The Indian economy is forecast to expand 11.5% in 2021, the fastest among major economies, and a turnaround from 2020’s decline of 8%. The big upgrade is as a result of “a faster-than-expected recovery at its factories and farms.”
The agency also expects global trade to rebound this year: recording 8.1% growth after falling 9.6% last year.
Meanwhile, the International Labour Organization (ILO) has reported that the coronavirus pandemic wiped out 8.8 percent of global working hours, equivalent to 255 million full-time jobs, causing a crisis of unprecedented inequality and threatening the return to the labour market of a generation of women, young workers and low-skilled employees.
The United Nation organization added in its ‘COVID-19 and the World of Work’ report that, global labour income fell by an estimated $3.7 trillion in 2020, or 4.4 percent of the global gross domestic product (GDP) of 2019.
The ILO estimates that the global decline in employment was around 114 million in 2020 compared to 2019.
It also highlights that millions of more people suffered a substantial cut in their working hours, causing a crisis of income.
In other words, while millions of workers around the world are still technically employed, their working hours have been cut so severely that they struggle to make ends meet and afford the basics like food and shelter.
