By Isaac Cohen*
The International Monetary Fund and the World Bank almost virtual annual meetings are entering their second week in Washington, with the world economy still besieged by the pandemic. The increased contagion caused by the Delta variant of the coronavirus has led to disruptions in worldwide production and transport that are slowing down the global recovery, which started in the second half of last year. Moreover, with increased public expenditure, to combat the virus and to support the economic reactivation, supply bottlenecks, labor shortages and higher energy prices are generating inflationary pressures.
Several economic policy principles have been confirmed during the pandemic. For instance, the essential role of public health to deal with the virus, with the consequent need to increase public expenditures. Also, vaccines are the most effective measure against contagion, but have generated profound disparities in vaccination between advanced economies and the rest of the world.
In this context, the Monetary Fund has revised downwards, to 5.9 percent, its global growth projection for 2021, while it has left unchanged, at 4.9 percent, the projection for 2022. The major advanced economies, including the United States, Western Europe and Japan are projected to return to pre-pandemic output levels by 2022. However, for emerging market and developing economies (excluding China) the return to pre-pandemic output levels is projected to be reached in 2024.
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.