IMF: growth remains the same, but differences are increasing | Financial

That writes the International Monetary Fund (IMF) in an update of the World Economic Outlook, the semi-annual report on the state of the world economy. This shows that the world economy will grow by 6% this year, next year growth will drop slightly to 4.9%.

That 6% is no change from the previous expectation. But the IMF sees that the differences between countries have widened. The United States is in a real growth spurt this year, with an increase of 7%. A few months ago, 6.4% growth was expected.

The eurozone is also growing slightly faster this year, with 4.6% instead of 4.4%. A separate figure for the Dutch economy was not disclosed. Emerging countries, such as China and India, are growing less rapidly than the IMF had previously expected.

This is partly due to the speed with which vaccines are being developed in developed countries. About 40% of the population has already been vaccinated, compared to less than 20% in emerging countries. In low-income countries, the percentage is even lower.

The IMF warns that low vaccination coverage is also an economic risk. As a result, new virus variants can arise that are also dangerous for already vaccinated people. In that scenario, where there would be a virus that is 50% more contagious than the original variant, global growth in 2021 and 2020 would be more than 0.8 percentage points lower.

The fact that some countries are doing so much better is not only due to more vaccines, but also to government support measures. For example, US President Biden guided a $1,900 billion bailout package through Congress early this year.

All that support comes with a price. In 2020, the amount of government debt was almost as large as the global economy. Never before has it been this high, and the IMF does not expect a decline in the coming years.

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