World Economic Outlook

The International Monetary Fund recently released the World Economic Outlook titled “Managing Divergent Recoveries”.

Key Findings of the report

  • The report has predicted GDP growth of India for the current fiscal year 2022 to be 12.5%. This is 1% higher than the previous projection of 11.5% in January 2021. This is the highest among the emerging economies and also among the elite group of advanced economies.
  • Also, the growth projection of India for the year 2023 has been increased from 6.8% to 6.9%. Earlier the IMF had predicted the growth rate of India to be 6.8%.
  • The global economy is to grow at 6% in 2021 and is expected to moderate to 4.4% in 2022. In 2020, the global economy contracted by 3.3%.
  • According to the report, China has returned to pre-COVID GDP in 2020. However, many others are not expected to return till 2023.
  • Hotel and Restaurant sector has suffered huge production and employment losses due to COVID-19.
  • According to the report, good recovery is expected in North America, India and China.
  • UK and US are outperforming on vaccine front. On the other hand, Asia is lagging on vaccine roll out.
  • The economies that are dependent on Tourism are severely hit. Eg: Spain.
  • Unlike 2008 financial crisis, the global economic recovery looks lopsided (one side is higher than the other). This is mainly because the roll out of vaccines is different in different parts of the world. Also, the fiscal support differs across the border.

International Monetary Fund

The IMF was set up after the Second World War to assist in the reconstruction of war-ravaged countries. It was created in 1945. It is governed by and accountable to 189 countries. India joined the IMF in 1945. Apart from World Economic Outlook, the IMF also releases Global Financial Stability Report.

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