SJ Salomon International predictions

The International Monetary Fund has upgraded its forecast for the global economy for this year and next. Compared with an earlier forecast in January, the IMF has stated that it expects the global economy to expand by 6% this year and 4.4% in 2022. The prediction in January was that this year would see growth of 5.4% and 4.2% next year.

Analysts at SJ Salomon International say the upgraded forecast reflects the upwardly revised predictions for developed economies such as those of the US and the UK.

The US economy is expected to benefit significantly from a recently approved stimulus package worth $3 trillion. The UK has so far managed to roll out one of the most successful vaccine campaigns in the world. With almost half of the UK population already vaccinated, the nation’s economy is expected to expand by 5.3% this year after a massive decline of 9.9% in 2020.

The IMF believes that, although the UK experienced one of the worst contractions among the euro zone countries, its vaccination program looks set to ensure that its economic growth will outpace that of the euro zone, which is predicted to expand by 4.4% this year.

However, the IMF has warned that economic recoveries are diverging. For those countries that have access to the necessary supply of vaccine, economic recovery is within reach. For poorer countries, without the means to secure sufficient doses of vaccines for their populations to reach herd immunity, further economic challenges are a more immediate reality.

“Although a way out of the crisis caused by the pandemic is becoming increasingly possible thanks to the vaccine, the gap between the rich and the poor is likely to widen,” says Youta Watanabe, Chief Finance Officer at SJ Salomon International.

“It will be important to address the divergences between countries and also within countries as we continue to navigate our way through this unprecedented crisis,” added SJ Salomon’s CFO.