David Malpass, president of the World Bank. Photo: WB
By Isaac Cohen*
The virtual spring meetings of the World Bank and the International Monetary Fund come to an end this week, with both optimism and caution. The optimism derives from the projection that the world economy is pulling out of the fall of 3.3 percent caused by the pandemic in 2020, the worst in peacetime since the 1930s Great Depression. Revised projections by the Fund for 2021 place world economic growth at 6 percent, the highest registered since comparable data gathering started in 1980. Among the advanced economies, the United States is projected to grow over 6 percent on account of increased fiscal support, while vigorous growth is also projected for this year at 8 percent in China and 11.5 percent in India.
However, the note of caution originates from the fact that in the rest of the world economy the Fund estimates that 150 economies will not yet return to the income levels attained before the pandemic in 2019. Therefore, the justified description of a “K- shaped” recovery, or of “divergent recoveries,” as indicated by the title of the Fund’s World Economic Outlook. https://www.imf.org/en/Publications/WEO/Issues/2021/03/23/world-economic-outlook-april-2021
To avoid a slowdown in the recovery and a deepening of inequality among the world economies, US Treasury Secretary Janet Yellen called for more vaccinations in middle and low-income countries and she recalled a lesson from the previous financial crisis, “don’t withdraw support too quickly.” (Washington Post 04/06/21).
*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.