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“The IMF strikes a somewhat more optimistic tone thanks to vaccines and stimulus support which offset the weak near-term outlook in some parts of the world. Downside risks largely come from the pandemic and the risk of premature policy support withdrawal”, writes Trieu Pham, Emerging Markets Sovereign Debt Strategist at ING.

Additional Quotes:

“The IMF’s latest World Economic Outlook update provides a glimmer of hope. After the 3.5% contraction in 2020, global growth is set to rise by 5.5% in 2021 and 4.2% in 2022. In contrast to the October update, this marks a shallower contraction and an upward revision for 2021 growth thanks to vaccines and stimulus support.”

“On an individual country level, there are substantial divergences, both in the growth outlook and in the revisions undertaken in the update. The improved 2021 growth outlook is largely down to advanced economies which will grow by 4.3% (+0.4ppt vs October 2020 update), thanks to rapid vaccines rollout and supportive fiscal stimulus. On aggregate, emerging market and developing economies (EMDE) have also seen upward revision to growth 6.3% (+0.3ppt), but the divergence in prospects remain.”