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News August 02, 2021

IMF Ups Forecast For US Economic Growth

Still, there are headwinds domestically and the picture for developing economies has darkened.

By  Christopher Ruvo

The International Monetary Fund (IMF) has raised its forecast for economic growth in the United States in 2021 and 2022.

The IMF, a Washington, D.C.-based international organization that works to foster global monetary cooperation and secure financial stability, predicts that the U.S. economy will increase 7% year over year in 2021 and 4.9% in 2022. Those figures represent hikes of 0.6 and 1.4 percentage points over the previous forecast.

The increased growth forecast assumes that Congress will approve President Joe Biden’s $4 trillion spending plan on infrastructure, education and family support, the IMF noted. A stronger U.S. economy typically benefits the promotional products industry, which tends to trend in the direction of broader economic performance.

For the global economy, the IMF is forecasting growth of 6% in 2021. That’s unchanged from the organization’s prediction from earlier this year. While IMF raised forecasts for economic increases in advanced economies, it reduced estimates for developing countries that are contending with COVID-19 surges, which accounts for the global growth forecast remaining the same.

On a brighter note, IMF now predicts global growth of 4.9% in 2022 – up 0.5 percentage points from what it had forecast in April.

“Close to 40% of the population in advanced economies has been fully vaccinated, compared with 11% in emerging market economies, and a tiny fraction in low-income developing countries,” Gita Gopinath, the IMF’s chief economist, said during a news conference.

Gopinath continued: “Faster-than-expected vaccination rates and return to normalcy have led to upgrades, while lack of access to vaccines and renewed waves of COVID-19 cases in some countries, notably India, have led to downgrades.”

It remains to be seen what impact, if any, the recent rise in COVID infections in the United States, driven by the so-called delta variant of the disease, has on projected economic growth. The return of mask recommendations from the CDC and mask mandates in select areas has stoked concern, but also potentially opportunity for promo.

IMF also predicted that inflationary pressures that have been impacting all parts of the economy, including promo, could ease to pre-pandemic levels in 2022: