IMF notes signs global economic recovery, but risks remain

The International Monetary Fund noted signs of a significant recovery in the global economy, but warned that risks continue to threaten that improvement, including the possibility of new mutations of the Covid-19 virus.

The IMF added that it will update its predictions issued in January for global economic growth by 5.5% in early April, to reflect the impact of the new fiscal stimulus recently disbursed by the US government, but it did not reveal any other details about what it will announce.

In a speech to the First Deputy Director-General of the International Monetary Fund, Geoffrey Okamoto, at the China Development Forum, Okamoto raised concerns about the worsening difference between advanced economies and emerging markets and the fact that about 90 million people have fallen below the acute poverty line since the beginning of the epidemic until now.

Okamoto stated that China has already recovered to the levels of growth it was before the epidemic crisis, bypassing all major global economies, but the weak individual consumption in the country still hinders investments in it, while outside China’s borders there are indications of concern about the widening gap between advanced and emerging economies.

The International Monetary Fund expects that the cumulative income per capita in developed and emerging countries, excluding China, will decrease between 2020-2022 by 22% than it would have been without the epidemic crisis, which will push more people to descend below the poverty line, and the outlook for the future remains “exceptionally unstable”, Okamoto said.

In the past, advanced economies witnessed a decline in their production by 5% below the level they were heading in growth before the economic recession, and the decline continued even after 5 years after the onset of the recession, and it may be worse now in countries that will not be able to respond to the changes and move their economy completely to address the recession. In addition, its service sectors have been greatly affected by the epidemic, in addition to the tragic situation of some countries that are mired in debt.

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