IMF forecasts global growth in 2021 amidst the pandemic crisis

The International Monetary Fund (IMF) stated in its recent report that the pandemic crisis is likely to continue but the global economy will witness a strong rebound this year. IMF has forecast global growth of 5.5% this year and 4.2% in 2022 in the report titled "Policy Support and Vaccines Expected to Lift Activity", on Tuesday.

IMF chief economist Gita Gopinath said that vaccine supply and production boost spurred the economy to life. However, the gap between rich and poorer nations is likely to widen, she added.

Oil prices will rise by up to 20 per cent and the oil field is expected to witness a comeback. The IMF estimated Saudi Arabia to bounce back with 2.6% growth in 2021 and 4% in 2022. India is expected to grow at 11.5 and 6.8 in 2021 and 2022, respectively. The Gulf economy is expected to increase by 3.2 per cent this year.

"Much now depends on the outcome of this race between a mutating virus and vaccines to end the pandemic, and on the ability of policies to provide effective support until that happens," Ms Gopinath said to AFP.

The gradual improvement in the financial conditions for advanced economies is anticipated to remain passive and not drop as major central banks are assumed to maintain their current policy to the end of 2022.

"Aggressive and swift monetary, fiscal, and financial sector policies have helped prevent worse outcomes," the report states adding that these measures undertaken by the governments should remain until vaccines support the start of a return to normal. Policy actions emphasizing green infrastructure and digitalization should be ensured while considering productivity growth.