IMF/Okamoto: There are signs the global economy is recovering

London, March 23 (HNA) – First Deputy Managing Director of the International Monetary Fund, Geoffrey Okamoto, said on Saturday that there are signs the global economy is recovering, even though significant risks remain related to the coronavirus strains.

According to Okamoto, the IMF will update its January forecast for global growth of 5.5 percent next month to reflect the latest relief package approved in the United States.

European Central Bank President Christine Lagarde also confirmed earlier this week that the $1.9 trillion economic stimulus package will “provide a modest boost” to the economic growth in the Eurozone.

In January, we projected 2021 global growth at 5.5 percent, but prospects of a stronger recovery are emerging – because of additional fiscal stimulus, especially in the U.S., and the prospects of broader vaccination.

“We will update our global forecasts in the new World Economic Outlook coming out in early April. However, the global recovery has been incomplete and unequal” he said, and added:

“It is incomplete because despite a stronger than expected recovery in the second half of 2020, GDP remains well below pre-pandemic trends in most countries. The recovery paths have also been different across countries, as well as across sectors.

“China , in many ways, has already completed its recovery, returning to its pre-pandemic growth levels ahead of all large economies. But growth still lacks balance, with private consumption lagging investment. We expect consumption will catch up, as investment growth normalizes. But there are significant risks which I will describe momentarily.”

Ha stateted that, outside of China, though, there were worrying signs that the gap between advanced economies and emerging markets is growing and added:

“We project that cumulative income per capita in emerging and developing countries, excluding China, between 2020 and 2022 will be 22 percent lower than what it would have been without the pandemic.

“That will translate into close to 90 million people falling below the extreme poverty threshold since the pandemic started.

“China has been a bright spot in its continued fight against poverty, but even there the pandemic has hurt vulnerable people the most.”

He said, “As I said, uncertainty about the recovery is exceptionally large” and went on as follows:
“We don’t know how prolonged the health crisis will be. Access to vaccines remains very uneven, both across advanced and emerging economies.

“Low-income countries might not see significant vaccination well into 2022, and that is a problem: this pandemic will only really be over when it is over for everyone.

“Another risk is the spread of resistant mutations that threatens to reduce the efficacy of current vaccines and could undermine or delay the recovery.”