IMF forecast: global economy to grow by 5.5 percent in 2021

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The 2020 slump was less bad than feared, with a drop of 3.5 percent worldwide.

IMF forecast: global economy to grow by 5.5 percent in 2021

International Monetary Fund (IMF) logo.

Despite the corona crisis, the International Monetary Fund (IMF) has raised its forecast for global economic growth this year by 0.3 percentage points to 5.5 percent.

The reason given by the IMF on Tuesday was the positive effect of the vaccination campaigns that were being launched and the additional stimulus measures recently decided in the USA and Japan.

Less bad than feared

The slump in the global economy in 2020 with an estimated minus of 3.5 percent was also not as bad as feared in the last forecast in October, when 4.4 percent was assumed.

As in October, the IMF is forecasting global economic growth of 4.2 percent for the coming year. Chief economist Gita Gopinath warned that the forecasts in view of the pandemic and the increase in infections in many industrialized countries are still associated with great uncertainty. “Ending the pandemic now depends a lot on the race between a mutating virus and the vaccinations, as well as the ability of politicians to provide effective support until the time comes,” Gopinath wrote in a blog post on the forecasts.

Eurozone

For Germany, the IMF has lowered its forecast for the current year by 0.7 percentage points to 3.5 percent, followed by growth of 3.1 percent in the following year.

For the euro zone as a whole, the IMF also expects lower growth this year; the forecast has been lowered by 1 percentage point to an increase of 4.2 percent.

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