International Monetary Fund upgrades Canada's 2021 growth outlook by most among advanced economies

Stores Reopen Under Strict Conditions As Lockdown Measures Ease

Sean Gallup Getty Images By Bjarke Smith Meyer

In the IMF's estimation, the global rebound will gradually lose momentum and return to pre-COVID levels of just above 3 per cent growth.

The Washington-based fund's World Economic Outlook also boosted its forecast for the global economy, anticipating vaccine rollouts over the summer that will strengthen economic recovery through the second half of the year.

Tuesday's growth forecast is subject to high uncertainty.

The report also said that the recovery in emerging markets is expected to be slower than in advanced economies - with significant divergence across countries - driven by the less supportive stance of central banks over the past few months, in response to higher commodity prices; higher domestic inflation; the improved economic outlook and higher USA rates.

In the March report, IMF said the Korean economy has weathered the COVID-19 pandemic "comparatively well", supported by its "sound macroeconomic fundamentals, a timely and effective public health response, and the deployment of a comprehensive set of fiscal, monetary, and financial measures".

"For the Emerging and Developing Asia regional group, projections for 2021 have been revised up by 0.6 percentage point, reflecting a stronger recovery than initially expected after lockdowns were eased in some large countries (for example, India)", the WEO said.

"The worldwide community also needs to work together to ensure that financially constrained economies have adequate access to global liquidity so that they can continue needed health care, other social, and infrastructure spending required for development and convergence to higher levels of income per capita", the IMF report said.

The IMF said that divergent recovery paths among countries are likely to create wider gaps in living standards across countries compared to pre-pandemic expectations.

The sub-Saharan Africa region - which includes Ghana, Kenya, South Africa and Nigeria - continues to feel the pandemic's impacts. "Output losses have been particularly large for countries that rely on tourism and commodity exports and for those with limited policy space to respond".

While China returned to its pre-Covid-19 GDP levels in 2020, the U.S. is expected to surpass its pre-Covid-19 GDP levels in 2021.

"Global prospects remain highly uncertain one year into the pandemic".

"Such losses are reversing gains in poverty reduction, with an additional 95 million people expected to have entered the ranks of the extreme poor in 2020 compared with pre-pandemic projections", Ms. Gopinath wrote.

The development of the Covid-19 pandemic - such as the emergence of new strains - remains a risk to the global outlook, the International Monetary Fund warned. "Multi-speed recoveries could pose financial risks if interest rates in the United States rise further in unexpected ways", she said.

The IMF also called for strong global cooperation - not only to narrow the gap in living standards of low-income developing countries but also to ensure the universal distribution of vaccines, at affordable prices.

"Faster progress in vaccinations can uplift the forecast, while a more prolonged pandemic with virus variants and delayed vaccines can lead to a sharp downgrade", said Gopinath. "On the global stage, first and foremost, countries need to work together to ensure universal vaccination".

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