The recovery of the global economy is accelerating

The International Monetary Fund (IMF) is seeing signs that the recovery of the global economy is gaining momentum. However, it warned that the risks to growth remain high, including mutations in the new coronavirus. IMF Deputy Chief of Staff Geoffrey Okamoto said the fund will present an updated forecast for the world economy in early April, which will already take into account new fiscal stimulus in the US. Although he did not provide any details immediately, this could mean an increase in the forecast. The IMF expected a global expansion of 5.5% in January. According to the IMF, the global economy fell by 3.5% last year. Speaking at the China Development Forum, he immediately expressed concern about the growing divergence between developed economies and emerging markets. It is estimated that around 90 million people have fallen below the extreme poverty line since the start of the new coronavirus pandemic. According to Okamoto, China's growth has already reached pre-pandemic levels, overtaking all other major economies, although private consumption is still lagging behind investment. Outside China, there is a worrying widening of the gap between developed and emerging economies. The overall outlook for the world economy remains "extremely uncertain," Okamoto said. It is not clear how long the pandemic will last. In addition, access to vaccines is still very unequal. Some countries, especially low-income, high-debt countries, also do not have enough room to increase spending to support growth and mitigate the economic consequences of the pandemic. According to Okamoto, tightening funding conditions could increase the vulnerability of countries with high public and private debt. He cited as an example the current increase in bond yields caused by market expectations that central banks would rather end monetary stimulus.