Vaccine cooperation could boost global income $9 trillion by 2025

Truck in front of containers

Truck in front of containers

The global economy will return to growth of 5.2% in 2021, the International Monetary Fund said, but the rebound will be slightly weaker than forecast in June, partly due to the extreme difficulties for many emerging markets and a slowdown in the reopening of economies due to the continued spread of the virus.

She advised that "to the extent possible, policies must aggressively focus on limiting persistent economic damage from this crisis".

China, where the coronavirus first surfaced late past year, had reopened most of its economy by April and has seen strong demand for exports of its medical supplies and technology products needed to aid remote working, the International Monetary Fund said.

Global GDP growth forecasts were trimmed for 2021.

"The virus is resurging with localized lockdowns being re-instituted. With low interest rates and high unemployment, boosting public investment-starting with maintenance and ramping up projects-can create jobs and spur economic growth".

The U.S. economy is expected to shrink 4.3 percent this year, with the Euro Area on track to contract 8.3 percent. "But with the Covid-19 pandemic continuing to spread, many countries have slowed reopening and some are reinstating partial lockdowns to protect susceptible populations", said the outlook report. The IMF now expects the world economy to grow by 5.2% next year, a -0.2 percentage points downgrade from June's forecast. Other rating agencies have also revised up their forecast on China's GDP growth this year, to 1.9 percent for Moody's and 2.7 percent for Fitch.

The US economy has been hit hard by coronavirus.

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Even as China has rebounded much faster than many expected, India, another populous country in Asia, is enduring difficulties.

Egypt's general government's overall balance, as an emerging market and middle-income country, to GDP ratio is projected to decline -7.5 percent in 2020, -8.1 percent in 2021, -5.2 percent in 2022.

Amid the crisis, euro bond issuance by emerging markets soared to $140 billion in the first half of 2020, up from $95 billion in 2019, according to the report.

The IMF produced the updated outlook for this week's virtual meetings of the 189-nation lending institution and its sister institution, the World Bank.

The committee said private creditors' and official bilateral creditors' participation in debt relief for poor countries is essential, with Georgieva adding that "further private sector participation is still needed, and it remains an outstanding issue".

The upgraded outlook compared to the dire forecast in June reflects the fact the downturn in the second quarter "was very bad but it was the less terrible than we expected", Gopinath said in an interview with AFP. "The ensuing revenues would help pay for critical services, such as health and social safety nets, during a crisis that has disproportionately hurt the poorer segments of society". The World Bank has estimated that the pandemic has thrown between 88 million and 114 million people into extreme poverty, which is defined as living on less than $1.90 a day. That would mark the largest increase in extreme poverty on data going back to 1990.

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