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IMF expects 5.5% global growth rebound thanks to vaccines, but SA lagging behind

26 January 2021 9:08 PM
Tags:
Economy
Global economy
IMF
The Money Show
International Monetary Fund
Bruce Whitfield
Kevin Lings
COVID-19
COVID-19 vaccine
economic recovery
vaccine rollout
global growth outlook
world growth outlook

'I guess the IMF is concerned about our lack of a vaccine rollout plan' says economist Kevin Lings on The Money Show.

Some good news from the International Monetary Fund (IMF) today - the organisation is revising its world growth outlook _up_wards.

However, South Africa is not quite on the same trajectory.

South Africa is about to start rolling out Johnson & Johnson's Covid-19 vaccine. © Horst Koenemund/123rf.com

Japan, the United States and India all growing quite nicely.

Bruce Whitfield, The Money Show host

But South Africa - they'd thought 'you'd bounce from a 6% decline to about 3%'. Now they say we're not even going to make that level!

Bruce Whitfield, The Money Show host

The IMF's projections hinge on Covid-19 vaccine availability.

Although recent vaccine approvals have raised hopes of a turnaround in the pandemic later this year, renewed waves and new variants of the virus pose concerns for the outlook.

IMF World Economic Outlook Update, January 2021

Amid exceptional uncertainty, the global economy is projected to grow 5.5 percent in 2021 and 4.2 percent in 2022. The 2021 forecast is revised up 0.3 percentage point relative to the previous forecast, reflecting expectations of a vaccine-powered strengthening of activity later in the year and additional policy support in a few large economies.

IMF World Economic Outlook Update, January 2021
IMF: Latest World Economic Outlook Growth Projections, January 2021

"I guess they're concerned about our lack of a vaccine rollout plan" says Kevin Lings (chief economist at Stanlib Asset Management) on The Money Show.

The IMF makes it very clear that in order to get the growth rate to look better... you've got to have a successful vaccine dissemination programme and it's got to be administered pretty much in the first half of the year!

Kevin Lings, Chief economist - Stanlib Asset Management

In some countries, particularly the US and Japan, the IMF is also flagging that it helps enormously that they've got this big fiscal stimulus

Kevin Lings, Chief economist - Stanlib Asset Management

South Africa's first tranche of 1.5 million doses (population 59+ million) from India is expected to arrive before the end of January.

What you see in the [IMF] data is partly a difference between those countries that seem to be able to get their vaccine programme in order and those that are struggling. Clearly with those that can do better, the expectation is their growth will improve.

Kevin Lings, Chief economist - Stanlib Asset Management

There is a risk with the whole growth initiative the IMF is describing because if the vaccines are not effective or if they can't be rolled out... then clearly we are going to have a very disappointing growth outcome relative to what the current expectation is.

Kevin Lings, Chief economist - Stanlib Asset Management

In South Africa's case our government's got areas of financial constraint...

Kevin Lings, Chief economist - Stanlib Asset Management

The country's lacking in two critical areas he says: the lack of money at government level to help ourselves, and the vaccine rollout (or current lack thereof).

It feels to me that we have ad hoc programmes. We get lobbied by certain groups; we respond to those; we try and spend some money, but what is the overall initiative?

Kevin Lings, Chief economist - Stanlib Asset Management

For more from Lings, take a listen:




26 January 2021 9:08 PM
Tags:
Economy
Global economy
IMF
The Money Show
International Monetary Fund
Bruce Whitfield
Kevin Lings
COVID-19
COVID-19 vaccine
economic recovery
vaccine rollout
global growth outlook
world growth outlook

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