IMF head Kristalina Georgieva says prospects of global economic growth have increased

The head of the International Monetary Fund, Kristalina Georgieva, said that the prospects of global growth have increased since the month of January. However, she further warned that uneven progress in fighting the pandemic could hamper the economic growth. Georgieva on Tuesday, March 30 said that IMF releases will release its economic forecast next week and it will show the global economy growing at a faster pace than the 5.5 per cent gain it projected at the start of the year.

“We now expect a further acceleration: partly because of additional policy support—including the new fiscal package in the United States; and partly because of the expected vaccine-powered recovery in many advanced economies later this year. This allows for an upward revision to our global forecast for this year and for 2022, as you will see in our World Economic Outlook next week”, said Georgieva.

Georgieva appreciated the governments across the globe as she highlighted that they had taken few extraordinary actions over the past year. This included providing a combined $16 trillion in order to support the financial sector by the world's central banks. Georgieva said that without this prompt response, the last year's downturn would have been three times worse as it could have been another ‘Great Depression’. “The cumulative loss in per capita income, relative to pre-crisis projections, will be 11 percent in advanced economies by next year. For emerging and developing countries, excluding China, the loss will be much worse—at 20 percent, cutting one-fifth of what is already a much smaller per capita income than in richer countries”, she highlighted.

IMF hails Indian economy 

In another significant development, the IMF said that  India's economy is on the path of gradual recovery, ahead of its next month's spring meeting with the World Bank. The IMF is scheduled to release its World Economic Outlook on April 6. At a news conference, IMF's spokesperson Gerry Rice said, "India's economy is on the path of gradual recovery, real GDP growth, returned to positive territory in the fourth quarter of 2020.  And that's for the first time actually since the start of the pandemic and it's supported by a pickup in gross, fixed capital formation." "Beyond that, I can say that high-frequency indicators including PMIs trade and mobility suggest continued recovery in the first quarter of this year, '21; however, the recent emergence of the variants and localized lockdowns could pose risks to a sustained recovery," Rice added.

(Image Credits: AP)