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China will drive global economic growth in pandemic recovery, says IMF

China will Drive Global Economic Growth in Pandemic Recovery: IMF

WASHINGTON – China will boost global economic growth in the years to come as the world recovers from a pandemic that has killed 2.9 million people, the International Monetary Fund (IMF) predicts.
China will contribute more than a fifth of the total increase in Global Gross Domestic Product (GDP) in the five years to 2026, according to Bloomberg calculations based on IMF forecast released on Tuesday.
Global GDP is expected to grow from more than $28 billion to $122 billion during this period, after falling $2.8 billion last year in the largest peacetime shock on production since the Great Depression.
The United States and India will be the second and third largest contributors to global growth over the period, according to the IMF, with Japan and Germany rounding out the top five.
Overall, the IMF predicts that the global economy will grow by 6% this year, before slowing to a 3% pace by 2026. It also warned that the growth of the upcoming expansion could be unevenly distributed, with developing economies facing larger losses and slower recoveries.
“Income inequality is likely to increase dramatically as a result of the pandemic,” the IMF said in its World Economic Outlook report.
“It is estimated that nearly 95 million additional people fell below the extreme poverty line in 2020 compared to pre-pandemic projections.”
One of the reasons for this divergence is the faster-than-expected recovery in the United States. It’s the only large economy where the IMF’s GDP forecast for 2022 is actually higher today than it was before the pandemic.
Rising US interest rates could pose a threat to the recovery in heavily indebted emerging and developing countries, IMF chief economist Gita Gopinath wrote in a blog post.

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