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A Hobbled Recovery Along Entrenched Fault Lines

By Abdulazeez KurangaPosted on Posted in Africa & World EconomyTagged , , , , , , , , No Comments on A Hobbled Recovery Along Entrenched Fault Lines

The global recovery continues but momentum has weakened, hobbled by the pandemic. Fueled by the highly transmissible Delta variant, the recorded global COVID-19 death toll has risen close to 5 million and health risks abound, holding back a full return to normalcy. Pandemic outbreaks in critical links of global supply chains have resulted in longer than expected supply disruptions, feeding inflation in many countries. Overall, risks to economic prospects have increased and policy trade-offs have become more complex.

Inflation Scares in an Uncharted Recovery

By Abdulazeez KurangaPosted on Posted in Africa & World EconomyTagged , , , , , , No Comments on Inflation Scares in an Uncharted Recovery

The good news for policymakers is that long-term inflation expectations are well anchored, but economists still disagree about how enduring the upward pressure for prices will ultimately be.

Some have said government stimulus may push unemployment rates low enough to boost wages and overheat economies, possibly de-anchoring expectations and resulting in a self-fulfilling inflation spiral. Others estimate that pressures will ultimately be transitory as a one-time surge in spending fades.

Drawing Further Apart: Widening Gaps in the Global Recovery

By Abdulazeez KurangaPosted on Posted in Africa & World EconomyTagged , , , , , , , No Comments on Drawing Further Apart: Widening Gaps in the Global Recovery

The global economic recovery continues, but with a widening gap between advanced economies and many emerging market and developing economies. Our latest global growth forecast of 6 percent for 2021 is unchanged from the previous outlook, but the composition has changed.

Growth prospects for advanced economies this year have improved by 0.5 percentage point, but this is offset exactly by a downward revision for emerging market and developing economies driven by a significant downgrade for emerging Asia. For 2022, we project global growth of 4.9 percent, up from our previous forecast of 4.4 percent. But again, underlying this is a sizeable upgrade for advanced economies, and a more modest one for emerging market and developing economies.

Managing Divergent Recoveries

By Sheriffdeen AdeotiPosted on Posted in Africa & World EconomyTagged , , , , , , No Comments on Managing Divergent Recoveries

It is one year into the COVID-19 pandemic and the global community still confronts extreme social and economic strain as the human toll rises and millions remain unemployed. Yet, even with high uncertainty about the path of the pandemic, a way out of this health and economic crisis is increasingly visible. Thanks to the ingenuity of the scientific community hundreds of millions of people are being vaccinated and this is expected to power recoveries in many countries later this year. Economies also continue to adapt to new ways of working despite reduced mobility, leading to a stronger than anticipated rebound across regions. Additional fiscal support in large economies, particularly the United States, has further improved the outlook.

In our latest World Economic Outlook, We are now projecting a stronger recovery for the global economy compared with our January forecast, with growth projected to be 6 percent in 2021 (0.5 percentage point upgrade) and 4.4 percent in 2022 (0.2 percentage point upgrade), after an estimated historic contraction of -3.3 percent in 2020.

COVID’s Impact in Real Time: Finding Balance Amid the Crisis

By Sheriffdeen AdeotiPosted on Posted in AgenciesTagged , , , , , No Comments on COVID’s Impact in Real Time: Finding Balance Amid the Crisis

The IMF analyzed the economic effects of lockdowns and voluntary social distancing using two high-frequency proxies for economic activity: mobility data from Google and job openings posted on the website Indeed. As illustrated in the top chart below, over the entire sample of 128 countries used in the analysis, lockdowns and voluntary social distancing contributed equally to the drop in mobility during the first 3 months of a country’s epidemic.

Reopening from the Great Lockdown: Uneven and Uncertain Recovery

By Abdulazeez KurangaPosted on Posted in AgenciesTagged , , , , , , , No Comments on Reopening from the Great Lockdown: Uneven and Uncertain Recovery

Compared to the April World Economic Outlook forecast, the IMF now projects a deeper recession in 2020 and a slower recovery in 2021. Global output is projected to decline by -4.9 percent in 2020, 1.9 percentage points below our April forecast, followed by a partial recovery, with growth at 5.4 percent in 2021.

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