IMF Projects 2021 Global GDP to Expand 5.5% but Warns New Strains Could Threaten Growth

The International Monetary Fund (IMF) projected the world economy this year to expand 5.5%, reflecting expectations of a vaccine to strengthen and revive economic activities, while forecasting ASEAN-5 countries to grow 5.2%. 

 

According to IMF latest World Economic Outlook, published Tuesday, the coronavirus vaccinations roll-out have raised hopes of a turnaround in the pandemic in 2021, however, the new virus strains pose worries for the outlook.  

 

IMF’s 2021 forecast is revised up 0.3% point from the previous October’s projection, based on a positive effect of Covid-19 vaccine and additional policy support in a few large economies. The financial institution also expected the global economy to grow 4.2% in 2022, and anticipated ASEAN-5 countries—Thailand, Indonesia, Malaysia, the Philippines, and Singapore—to show a GDP growth of 5.2% this year and 6.0% in 2022.

 

For the recovery, IMF stated that the projection varies significantly across countries, depending on access to medical interventions, effectiveness of policy support, exposure to cross-country spillovers, and structural characteristics entering the crisis.