The global economic recession is turning out to be less severe than feared but governments should not withdraw their fiscal stimulus because the path ahead is perilous, the International Monetary Fund said Tuesday.
“While the global economy is coming back, the ascent will likely be long, uneven, and uncertain,” the international financial agency said, in its latest World Economic Outlook.
Since the summer, prospects have worsened significantly for some emerging and developing economies where coronavirus infections are rising rapidly.
For 2021, the IMF cut its global economic forecast for 2021 to a 5.2% growth rate from the prior 5.4% growth rate.
For 2022 and beyond, the global economy is expected to “moderate significantly” starting in 2022, the IMF said.
“Both advanced and emerging market economies are likely to register significant losses of output relative to their pre-pandemic forecasts,” said IMF chief economist Gita Gopinath, in a statement accompanying the report.