World Economic Outlook, October 2021: Recovery During A Pandemic
World Economic Outlook, October 2021
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- Published: October 12, 2021
Global recovery: current state and projections
- The global economic recovery is continuing amid a resurging pandemic that poses unique policy challenges and requires strong multilateral effort.
- The global economy is projected to grow 5.9 percent in 2021 and 4.9 percent in 2022, 0.1 percentage point lower for 2021 than in the July forecast.
- The downward revision for 2021 reflects:
- a downgrade for advanced economies—in part due to supply disruptions; and
- a downgrade for low-income developing countries, largely due to worsening pandemic dynamics.
- Partially offsetting factors include stronger near-term prospects among some commodity-exporting emerging market and developing economies.
- Rapid spread of Delta and the threat of new variants have increased uncertainty about how quickly the pandemic can be overcome.
- Policy choices have become more difficult, with limited room to maneuver.
Global prospects and policy priorities
- Gaps in expected recoveries across economy groups have widened since the July forecast, for instance between advanced economies and low-income developing countries.
- Inflation has increased markedly in the United States and some emerging market economies.
- As restrictions are relaxed:
- demand has accelerated; and
- supply has been slower to respond, contributing to price pressures.
- Although price pressures are expected to subside in most countries in 2022, inflation prospects are highly uncertain.
- Employment remains below pre-pandemic levels in many economies, forcing difficult policy trade-offs.
- Recommended multilateral actions:
- strong policy effort on vaccine deployment;
- action on climate change; and
- measures to strengthen international liquidity.
- National policy guidance:
- policies should be tailored to country-specific conditions and better targeted; and
- recognize that policy space constraints become more binding the longer the pandemic lasts.
Inflation Scares: outlook and policy implications
- Despite recent increases in headline inflation in both advanced and emerging market economies, long-term inflation expectations remain anchored.
- Headline inflation is projected to peak in the final months of 2021 but is expected to return to pre-pandemic levels by mid-2022 for most economies.
- Considerable uncertainty remains; inflation could exceed forecasts for a variety of reasons.
- Policy recommendations to address inflation risks:
- clear communication; and
- appropriate monetary and fiscal policies to help prevent “inflation scares” from unhinging inflation expectations.
Research and innovation: supporting long-term growth
- Basic research—undirected, theoretical, or experimental work—is identified as an essential input into innovation.
- New data that draw on connections from individual innovations and scientific articles show:
- wide-ranging international spillovers from basic research; and
- long-lasting economic impacts.
- Policy implication: supporting basic research can help fight the pandemic and boost long-term growth.
World Economic Outlook, October 2021: Recovery During a Pandemic
Content in this bundle
- Chapter 1
- Chapter 1 Annex
- Chapter 2
- Chapter 2 Annex
- Chapter 3
- Chapter 3 Annex
- Table1 Oct2021weo
- WEO Chapter 2 (October 2021) — Dataset overview
- WEO Chapter 3 Oct 2021 — Dataset overview
- WEO Chapter 1 Oct. 2021 — Dataset overview
- IMF World Economic Outlook, recovery during a pandemic, executive summary, October 2021
- Foreword
- World Economic Outlook, recovery during a pandemic, statistical appendix, October 2021
- World Economic Outlook, Recovery during a Pandemic, statistical appendix, table B1-B21, October 2021
- World Economic Outlook, Recovery during a Pandemic, statistical appendix, October 2021
- Full Report