Divergent recoveries from COVID-19 will continue into 2022. An equitable vaccine rollout and fiscal policy are the key factors on how quickly and successfully countries will recover, according to the IMF.
Advanced economies are spending around $4.6 trillion on pandemic-related recovery support for this year and beyond. As for emerging markets and developing economies, most of this spending was depleted in 2020. A few of these countries are looking to rebuild fiscal buffers, while others are raising monetary policy rates to respond to higher-than-anticipated commodity prices.
The global economy is projected to grow 6.0% in 2021 and 4.9% in 2022. Growth prospects for advanced economies improved by 0.5 percentage points this year, while the forecast for emerging and developing economies dropped 0.4 percentage points. IMF says “multilateral action has a vital role to play in diminishing divergences and strengthening global prospects” by investing in financially constrained economies, global vaccine rollouts and a greener recovery.