The global economy is set to lose over US$ 22 trillion between 2020 and 2025, due to the impacts of the coronavirus pandemic the International Monetary Fund (IMF) said on Tuesday. The economy will likely see a strong rebound this year, but the pandemic is causing severe damage said IMF chief economist Gita Gopinath.
Now at US$ 22 trillion, the projected cumulative output loss over 2020 to 2025, relative to the pre-pandemic projected levels remains substantial, Gopinath told reporters at a presentation of the World Economic Outlook, (WEO).
Much depends on the outcome of the race between the virus and vaccines to end the pandemic, and on the ability of policies to provide effective support until that happens, she added. There remains tremendous uncertainty
The projected growth recovery this year follows a severe collapse in 2020 that has had acute adverse impacts on women, youth, the poor, the informally employed, and those who work in contact-intensive sectors, the WEO report said.
Despite the losses, the spread of vaccines is expected to power a stronger global economic recovery in 2021, the IMF said.
After sinking 3.5% in 2020, the worst year since World War II, the global economy will likely grow by 5.5% this year, according to the forecast. The new figure is an improvement from the 5.2% expansion from the IMF's October forecast, and would mark the fastest year of global growth since 2010.
However, economies worldwide will need support from their governments to offset the damage caused by the pandemic. Additionally, the spread of virus mutations could slow down economic growth, said Gopinath.
The strength of the recovery is projected to vary significantly across countries, depending on access to medical interventions, effectiveness of policy support, exposure to cross-country spillovers, and structural characteristics entering the crisis,” the WEO report said.
Countries are currently rushing to roll out vaccination programs, while experts say that the global inoculation process could extend well into 2022.