By Isaac Cohen*
After the Great Recession of 2008, massive infrastructure investment in the Chinese economy contributed to pull out most emerging market economies from the slump. This time, the US economy is expected to play that role, together with the Chinese economy.
The World Economic Outlook, released today by the International Monetary Fund, revised upward this year’s world economic growth projections. The United States is projected to grow 6.4 percent, considering the rescue package of $1.9 trillion recently approved, which will have “significant spillovers to main US trading partners.” Vigorous growth is also projected by the Fund in the Chinese economy for 2021, at 8.4 percent, because “a forceful public investment response, and central bank liquidity support have facilitated a strong recovery.” Finally, this year’s projection for the Japanese economy has been revised upward, to 3.3 percent, while Euro area and United Kingdom projections have been revised down, due to recent lockdowns in those economies.
Emerging market and developing economies have undergone large output losses, most severe among commodity exporters and those dependent on tourism, 95 million persons have fallen into extreme poverty and 80 million more undernourished.
The outlook remains uncertain, depending decisively on the effectiveness of vaccinations against new virus mutations. Thus far, high income countries, with 16 percent of the world population, have purchased one half of vaccines produced. For instance, more than 60 million persons have been vaccinated in the United States. However, only a global vaccination campaign can overcome the global pandemic.
*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.