IMF has raised its global economic forecast for this year and next
Despite the ongoing corona pandemic, the International Monetary Fund (IMF) has raised its global economic forecast for this year and next. Driven by an upswing in the industrialized countries, the global economy is expected to grow by 6 percent in 2021 and by 4.4 percent in the coming year, according to the IMF. In the last forecast in January, IMF had expected growth of 5.5 percent for this year and 4.2 percent for 2022.
The stronger growth is mainly due to the corona vaccinations, the adaptability of the economy and measures to support the economy, as IMF chief economist Gita Gopinath explained. Because of the pandemic, the forecast is associated with great uncertainty, but “a way out of this health and economic crisis is increasingly visible”.
Growth this year will be boosted by developments in the USA: the IMF has raised its forecast for the world’s largest economy by 1.3 percentage points to 6.4 percent thanks to the successful vaccination campaign and a large economic stimulus package. For 2022, the IMF expects growth of 3.5 percent higher by one percentage point. The IMF is concerned, however, that investors are taking excessive risks in the US.
The broad S&P index alone has increased by more than 21 percent since last September. Relative to the fundamentals, the level on the stock exchanges is excessive when the uncertainty regarding economic development is taken into account, said IMF financial expert Tobias Adrian. In particular, the ratings in the technology sector are exaggerated, so that there will be an adjustment, warned Adrian.
For the euro zone, the IMF is raising its forecast for this and next year by 0.2 points each: economic output is expected to grow by 4.4 percent in 2021 and by 3.8 percent in 2022. In Germany, the gross domestic product is expected to grow by 3.6 percent in the current year – an increase of 0.1 points.