International Finance Forum (IFF) released on Saturday, November 4, its first "IFF Global Finance and Development Report," aimed to analyze, outline and forecast global economic outlook, risks and policy priorities. The report shows that the global economy has seen a rebound thanks to expanding vaccination coverage, continued fiscal stimulus and monetary accommodation.
Specifically, IFF estimates that the global economy is forecast to grow 5.9% this year, recovering to a pre-pandemic 2019 level. The global economy staged a strong rebound in the first half of this year, but the growth momentum has softened in the second, as outbreaks of the more contagious delta variant occurred in many parts of the world. The recovery remains on track, though the pace has continued to vary from one country to another.
However, the strong recovery has caused prices to rise in many countries. Global consumer price inflation is projected to reach 4.5% this year, and to moderate to 3.8% in 2022, as demand-supply gaps narrow, according to IFF estimates.
"Despite the momentum of the global economic recovery, there are still significant downside risks in the coming year," said Zhuang Juzhong, chief economist of IFF and a former deputy chief economist of the Asian Development Bank. "Slower-than-expected vaccine rollout, especially in the developing world, and more virus mutations could lead to resurgences of outbreaks worldwide, causing governments to reimpose strict containment measures thus slowing down growth."
In 2022, the global economy is projected to grow 4.7%, as supported by ongoing fiscal and monetary policies with expanding vaccination coverage, the IFF report shows. However, higher and more persistent inflation could prompt abrupt adjustments in the direction of monetary policy in advanced countries, IFF warned, adding that geopolitical tensions could also take a toll on the recovery.
IFF also pointed out in the report that the pandemic is leaving lasting scars on social and human development worldwide, as it has disrupted the global fight against extreme poverty and increased income inequality.
To address ongoing issues and ensure a stable outlook, IFF urged that the international community should work together to expedite vaccine uptake, ensure the stability of monetary policies, eliminate trade tensions, boost green finance development and accelerate support for low-income nations.
For the full report, please visit: GFAD report.
International Finance Forum (IFF)