Overall Updated Economic Forecast (+/- changes from October 2020 WEO):
| Country/Region | 2020 | 2021 | 2022 |
|---|
| India* | -8.0% (+2.3) | 11.5% (+2.7) | 6.8% (-1.2) |
| China | 2.3% (+0.4) | 8.1% (-0.1) | 5.6% (-0.2) |
| US | -3.4% (+0.9) | 5.1% (+2.0) | 2.5% (-0.4) |
| Japan | -5.1% (+0.2) | 3.1% (+0.8) | 2.4% (+0.7) |
| ASEAN-5 | -3.7% (-0.3) | 5.2% (-1.0) | 6% (+0.3) |
| Euro Area | -7.2% (+1.1) | 4.2% (-1.0) | 3.6% (+0.5) |
| UK | -10.0% (-0.2) | 4.5% (-1.4) | 5% (+1.8) |
| Russia | -3.6% (+0.5) | 3.0% (+0.2) | 3.9% (+1.6) |
| Brazil | -4.5% (+1.3) | 3.6% (+0.8) | 2.6% (-0.3) |
| Mexico | -8.5% (+0.5) | 4.3% (-0.8) | 2.5% (+0.2) |
| World | -3.5% (+0.9) | 5.5% (+0.3) | 4.2% (+0.0) |
*For India, forecasts are presented with fiscal years beginning in April.
So generally, broad upward revision in economic forecasts for last year and this incoming year on upbeat vaccine hopes. Make of this as you will.
Personally, I find this upwards revision to optimistic. I think the IMF is overestimating the speed in which vaccines can be deployed globally, and recovery might not take off full speed until late 2nd Quarter or early 3rd Quarter.
In particular, I do not believe the US will grow at 5.1%; likely, the growth for this year will top out at ~4% at most (although I personally see it to be between 3.5% - 4%). For the US to achieve 5.1% growth would mean a much more massive stimulus + much more rapid vaccine rollout, both of which look remote at this point. For the US' 2020 growth, I somewhat disagree with the upward revision compared to October's forecast; at that time, the IMF likely didn't factor in just the incredible degree of surge in COVID cases and renewed shutdowns, which likely had a negative economic impact as well. Granted, the additional $600 stimulus may have helped in 4th Quarter, but then again many of those $600 checks have often been delivered let.
I also find the downward revision for ASEAN-5 to be quite strange, as ASEAN-5 is one of the lesser-hit regions in the world. Personally, I think ASEAN-5's recovery and normalisation will be much more rapid than what is being forecast.
India is an interesting one. India had one of the worst declines in 2020, so I do not think that the IMF's prediction of a double-digit recovery for India this year is too far off. Having said that, I am interested in how the IMF arrived at 6.8% for 2022. India was already slowing down considerably pre-pandemic, reporting 6.1% and 4.2% growth rates in 2018 and 2019, respectively.
Considering the recent discovery of the UK variant of COVID, I am surprised the IMF didn't downgrade the UK's 2020 growth even more than they did. As they didn't forecast the havoc of the second lockdown in the UK caused by the 2nd variant in October 2020, I would expect the UK's decline in FY2020 to be much more than -10%.
