Averting a great divergence – MENAFN.COM

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Exiting the pandemic with minimal scarring will require policy action on several fronts The COVID-19 pandemic and the widespread lockdowns imposed in 2020 led to the worst peacetime global contraction since the Great Depression. The first half of 2020 saw record collapses in output and only a partial rebound in the second half as economies gradually reopened, supported by decisive fiscal and monetary policy measures. While the remarkable success in developing vaccines provides hope of conquering the pandemic, fresh waves of the disease and a mutating virus portend uncertain times and risky prospects for 2021.

In the January 2021 update of the World Economic Outlook, the IMF revised global growth upward for 2021—reflecting the start of COVID-19 vaccinations, continued policy support in systemically large economies, and adaptation to social distancing measures by firms and households. But the projection is fraught with uncertainty and highlights the stark divergence in prospects across countries. On the one hand, China returned to its pre-pandemic...read more...