The global economy is set to recover from the 2020 slump more quickly than originally forecast, encouraged at present by the soundness of the US economy, according to the latest forecasts made public on Tuesday by the International Monetary Fund.
The contraction in 2020 was unprecedented, the IMF says, but in 2021 the global economy is projected to grow at 6%, moderating to 4.4% in 2022. “Even with high uncertainty about the path of the pandemic, a way out of this health and economic crisis is increasingly visible,” Gita Gopinath, the chief economist of the Washington-based organisation said according to France Presse. The IMF nonetheless fears recovery will be uneven across countries.
In the euro zone, the IMF forecasts are slightly increased: 4.4% this year. Germany is expected to see a 3.6% growth rate, France –5.8%, Italy – 4.2% and Spain – 6.4%.
Worth noting however is that the rate is too slow to make up for last year’s 6.6% contraction, and Europe has to wait at least until the summer of 2022 to fully recover.
The IMF has also improved estimates regarding the Romanian economy. Whereas in October the Fund expected Romaniato have a 4.6% growth rate this year, Tuesday’s new projections point to a 6% increase. As for 2022, the IMF forecast is 4.8%.
Inflation is also predicted to go up by an annual 2.8% in 2021 as against 2.5% according to the autumn forecast, and to slow down to 2.1% next year. The current account deficit in turn will likely go slightly down, to 5% of GDP in 2021 and 4.7% in 2022.
The Liberal PM Florin Cîţu welcomes news as “fantastic,” and sees them as a sign of the international monetary institution’s confidence in the right-of-centre coalition government in Bucharest. In turn, the finance minister Alexandru Nazare says the IMF forecast confirms the Romanian authorities are on the right path.
“The economic growth forecast by the IMF is only on paper and for the right-wing faction; for Romanian citizens, it’s poverty,” the leader of the main opposition party in Romania, Social-Democrat Marcel Ciolacu argues on the other hand. He says utilities and food prices have skyrocketed, people’s spending power is dramatically low, the exchange rate for the Euro has reached 5 RON, and more than half of the country’s GDP relies on debt, which means that Romania does spectacularly in accounting terms, but fails to develop in economic and social terms. (tr. A.M. Popescu)