{
  "title": "Transcript of April 2021 World Economic Outlook Press Briefing",
  "publication": "IMF News, April 6, 2021",
  "sourceUrl": "https://www.imf.org/en/news/articles/2021/04/06/tr040621-transcript-of-april-2021-world-economic-outlook-press-briefing",
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  "summary": "Global growth projected at 6 percent in 2021 and 4.4 percent in 2022 after an estimated historic contraction of -3.3 percent in 2020.",
  "publishDate": "2021-04-06",
  "sections": [
    {
      "heading": "Global outlook and headline projections",
      "content": "- Global growth projected at 6 percent in 2021 and 4.4 percent in 2022 after an estimated historic contraction of -3.3 percent in 2020.\n- United States projected to grow at 6.4 percent in 2021.\n- China projected to grow at 8.4 percent in 2021.\n- IMF notes the global recovery has been stronger than the January forecast, driven mainly by upgrades for advanced economies and additional fiscal support in large economies."
    },
    {
      "heading": "Diverging recoveries and medium-term scarring",
      "content": "- Recoveries are diverging across and within countries; many countries are not expected to return to pre-pandemic GDP until 2023.\n- Average annual loss in per capita GDP over 2020 to 24 relative to pre-pandemic forecasts:\n  - 5.7 percent in low income countries\n  - 4.7 percent in emerging markets\n  - 2.3 percent in advanced economies\n- Additional 95 million people expected to have entered the ranks of the extreme poor in 2020 compared with pre-pandemic projections.\n- Job reallocation required by digitalization and automation; many lost jobs are unlikely to return and reallocation often entails severe earning penalties.\n- IMF estimates last year's collapse could have been three times worse without policy support.\n- Medium-term losses expected to be around 3 percent, smaller than after the global financial crisis but still substantial; emerging markets and low-income countries expected to suffer greater scarring due to more limited policy space."
    },
    {
      "heading": "Fiscal, monetary, and structural policy recommendations",
      "content": "- Swift policy action worldwide, including 16 trillion dollars in fiscal support, prevented far worse outcomes.\n- Current policy emphasis:\n  - Prioritize health care spending on vaccinations, treatments, healthcare infrastructure.\n  - Fiscal support should be well targeted to affected households and firms.\n  - Monetary policy should remain accommodative while proactively addressing financial stability risks.\n- Sequencing as recovery proceeds:\n  - Gradually scale back worker retention measures as labor markets normalize.\n  - Emphasize worker reallocation via targeted hiring subsidies and reskilling.\n  - Convert liquidity support into equity-like support for viable firms and develop out-of-court restructuring frameworks to expedite insolvencies; without this, insolvencies could rise sharply and put 1 in 10 jobs at risk in many countries.\n- Education and social policy:\n  - Devote resources to help children catch up on lost instructional time.\n  - Strengthen social assistance to arrest rising inequality.\n- Longer-term growth priorities:\n  - Invest in green infrastructure to mitigate climate change.\n  - Invest in digital infrastructure to boost productive capacity.\n- Financing recommendations for fiscally constrained economies:\n  - Improve tax capacity and increase tax progressivity.\n  - Deploy carbon pricing.\n  - Eliminate wasteful expenditures.\n  - Anchor policies in credible medium-term frameworks and adhere to high transparency standards to contain borrowing costs and rebuild buffers."
    },
    {
      "heading": "International cooperation and liquidity support",
      "content": "- Universal vaccination is essential; many countries likely to wait until the end of next year for widespread coverage.\n- Steps to speed vaccinations: ramp up production and distribution, avoid export controls, fully fund the COVAX facility, and ensure equitable global transfers of excess doses.\n- Ensure adequate access to international liquidity:\n  - Major central banks should provide clear guidance on future actions with ample time to prepare to avoid \"taper tantrum\" episodes.\n  - Low income countries benefit from extending the pause on debt repayments under the Debt Service Suspension Initiative and operationalizing the G20 common framework for orderly debt restructuring.\n  - A new allocation of IMF special drawing rights expected to provide needed liquidity protection; IMF expects about 21 billion of that to go to low income countries."
    },
    {
      "heading": "Risks, scenarios, and financial spillovers",
      "content": "- High uncertainty around projections:\n  - Faster vaccination progress could uplift forecasts.\n  - A prolonged pandemic or vaccine-evading variants could sharply downgrade forecasts.\n- Multispeed recoveries could pose financial risks if U.S. interest rates rise unexpectedly:\n  - Orderly, low increases in U.S. interest rates may be outweighed by positive growth spillovers from the U.S. recovery.\n  - A disorderly rise in rates could unwind inflated asset valuations, tighten financial conditions sharply, and worsen recovery prospects, especially for highly leveraged emerging markets and developing economies.\n- U.S. public debt: debt levels have risen significantly, but debt servicing costs have declined because interest rates remain very low; IMF does not flag immediate major concerns on U.S. debt servicing or rollover risks given current conditions, while stressing the importance of targeted, well-calibrated support."
    },
    {
      "heading": "Regional highlights and country-specific notes",
      "content": "- Sub-Saharan Africa:\n  - Region experienced a historic contraction of -1.9 percent in 2020.\n  - Recovery expected to resume with growth close to three and a half percent in 2021 and to continue into 2022.\n  - Tourism-dependent and resource-dependent economies particularly hard hit; the region entered the crisis with high debt vulnerabilities exacerbated by revenue declines and crisis-related spending.\n- United Kingdom:\n  - Upward revision for 2021; IMF notes part of the upward revision (0.3) is the impact of fiscal measures in the March budget; overall upward revision about 0.8.\n  - Strong vaccination rollout expected to support reopening by summer; Brexit-related trade effects and timing of recovery vary across sectors.\n- India:\n  - Forecast reflects a 1 percentage point increase for 2021 growth to 12.5 percent; forecast numbers precede a subsequent worrying uptick in cases and IMF views that the new wave poses severe downside risks.\n- China:\n  - Upgrade of about 0.3 percentage points for 2021 driven mainly by improved external demand and strong U.S. fiscal stimulus; recovery described as unbalanced and still reliant on public support.\n- Brazil:\n  - Projected to grow at 3.7 percent in 2021; outlook reflects factors in different directions including positive U.S. stimulus spillovers and higher domestic interest rates; vaccination rollout and business climate remain key to recovery.\n- Mexico:\n  - Projected GDP growth of 5 percent in 2021 driven mainly by external demand and exports to partners benefiting from U.S. fiscal stimulus; domestic demand remains subdued and vaccination rollout speed is a risk.\n- Argentina:\n  - Upgrade driven by less-negative-than-expected recent containment impacts and higher world food prices; challenges include high inflation and poorly anchored inflation expectations.\n- Pakistan:\n  - IMF projects growth of 1.5 percent in 2021 and 3 percent in 2022; IMF notes a subdued recovery and two-track dynamics with services lagging industry and construction. Question raised about reaching 2017 GDP level by 2026.\n- Fiscal and policy questions noted:\n  - IMF supports a global minimum corporate tax and is studying specific proposals, including the U.S. administration's corporate tax proposals; no specific minimum tax rate number provided at this time.\n  - IMF supports infrastructure investment and stresses the role of carbon pricing in climate mitigation.\n\nTranscript of April 2021 World Economic Outlook Press Briefing\n\n---\n\n\n References\n\n- Gita Gopinath\n- Argentina and the IMF\n- Brazil and the IMF\n- India and the IMF\n- Mexico and the IMF\n- United States and the IMF\n- Transcripts\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2021/04/06/tr040621-transcript-of-april-2021-world-economic-outlook-press-briefing"
    }
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    "Published: April 6, 2021",
    "Global growth projected at 6 percent in 2021 and 4.4 percent in 2022 after an estimated historic contraction of -3.3 percent in 2020.",
    "United States projected to grow at 6.4 percent in 2021.",
    "China projected to grow at 8.4 percent in 2021.",
    "IMF notes the global recovery has been stronger than the January forecast, driven mainly by upgrades for advanced economies and additional fiscal support in large economies.",
    "Recoveries are diverging across and within countries; many countries are not expected to return to pre-pandemic GDP until 2023.",
    "Average annual loss in per capita GDP over 2020 to 24 relative to pre-pandemic forecasts:",
    "Additional 95 million people expected to have entered the ranks of the extreme poor in 2020 compared with pre-pandemic projections.",
    "Job reallocation required by digitalization and automation; many lost jobs are unlikely to return and reallocation often entails severe earning penalties.",
    "IMF estimates last year's collapse could have been three times worse without policy support.",
    "Medium-term losses expected to be around 3 percent, smaller than after the global financial crisis but still substantial; emerging markets and low-income countries expected to suffer greater scarring due to more limited policy space.",
    "Swift policy action worldwide, including 16 trillion dollars in fiscal support, prevented far worse outcomes.",
    "Current policy emphasis:",
    "Sequencing as recovery proceeds:",
    "Education and social policy:",
    "Longer-term growth priorities:",
    "Financing recommendations for fiscally constrained economies:",
    "Universal vaccination is essential; many countries likely to wait until the end of next year for widespread coverage.",
    "Steps to speed vaccinations: ramp up production and distribution, avoid export controls, fully fund the COVAX facility, and ensure equitable global transfers of excess doses.",
    "Ensure adequate access to international liquidity:",
    "High uncertainty around projections:",
    "Multispeed recoveries could pose financial risks if U.S. interest rates rise unexpectedly:",
    "U.S. public debt: debt levels have risen significantly, but debt servicing costs have declined because interest rates remain very low; IMF does not flag immediate major concerns on U.S. debt servicing or rollover risks given current conditions, while stressing the importance of targeted, well-calibrated support.",
    "Sub-Saharan Africa:",
    "United Kingdom:",
    "India:",
    "China:",
    "Brazil:",
    "Mexico:",
    "Argentina:",
    "Pakistan:",
    "Fiscal and policy questions noted:",
    "[Gita Gopinath](https://www.imf.org/en/about/senior-officials/bios/shirin-hamid)",
    "[Argentina and the IMF](http://www.imf.org/external/country/ARG/index.htm)",
    "[Brazil and the IMF](http://www.imf.org/external/country/BRA/index.htm)",
    "[India and the IMF](http://www.imf.org/external/country/IND/index.htm)",
    "[Mexico and the IMF](http://www.imf.org/external/country/MEX/index.htm)",
    "[United States and the IMF](http://www.imf.org/external/country/USA/index.htm)",
    "[Transcripts](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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