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US Recovery Outlook Brightens But Global Economy Still Struggling

US Recovery Outlook Brightens But Global Economy Still Struggling

With the United States and Chinese economies picking up the outlook was upbeat on positive signs of a turnaround, CNN reported. However, economists focused on other economies around the world had concerns.

US Recovery Outlook Brightens But Global Economy Still Struggling

According to Kristalina Georgieva, the managing director of the International Monetary Fund, while there was an improvement overall, prospects were diverging dangerously not only at the national level but also across regions and countries. In fact, what was evident was a multi-speed recovery, with two engines powering it, the US and China.

US Recovery Outlook Brightens But Global Economy Still Struggling

Her comments came ahead of virtual meetings planned for a week at the IMF and the World Bank, which would focus on the Covid-19. Finance ministers of top economies would also convene a meeting hosted by Italy this week.

Hailing the good news Georgieva indicated that the IMF would, on Tuesday upgrade its global economic forecast.  According to the last prediction of the group,  global growth was set to clock 5.5% in 2021.

According to commentators, as per recent United States’ economic data a rosier view could be supported. According to data from the Labor Department with 916,000 job additions in March, it was the biggest gain since August and exceeded expectations. Investors would get to give their reactions on the report on Monday.

Joseph Brusuelas, chief economist at RSM US, wrote in a note to clients that an American economy heading for a strong rebound following a year of crisis induced by the pandemic was indicated in the March jobs report.

However, the job market had still not fully recovered, and the US was down 8.4 million positions as against February 2020.

However, industries that had taken hard hits were showing signs of recovery. Bars and restaurants, last month, added 176,000 jobs, while local and state education jobs were up by 126,000 with schools starting to reopen. Delivery services including UPS and FedEx that had benefited from the steep surge in online shopping, registered 17,000 job additions.

The US manufacturing sector was also on a roll, with the ISM Manufacturing Index recently reporting its best reading after 1983. Consumer confidence stood the strongest it had been in a year. US services sector data was due Monday.

The S&P 500 surged to an all-time high, Thursday, on the excellent performance stats as the index, for the first time, closed above 4,000.

However, according to commentators, elsewhere, slow vaccination campaigns and resurging cases could pose problems.

Georgieva said last week that there was danger as well. She added vaccines were not available yet everywhere and to everyone. She said too many people continued to face rising poverty and job losses and too many countries were falling behind.

Ignazio Visco, the governor of Italy’s central bank echoed Georgieva’s sentiments over the weekend. 

In an interview with the Financial Times, he said the main instrument that was available at the moment was neither fiscal nor monetary, it was vaccinations. He added that maintenance of the G20s close international cooperation was needed for avoidance of the vaccination campaign’s different stages across various countries resulting in the respective economies being hit by excessive divergences.

The United States reported over the weekend that more than 4 million doses of the coronavirus vaccine had been administered in 24 hours, which was a new record. With 61 million people fully vaccinated the US  now had 19% of the population protected against Covid-19.

Meanwhile, most other countries were struggling with vaccinations. The World Health Organization last week termed the vaccine rollout in Europe as unacceptably low. India with nearly 76 million doses had been able to vaccinate less than 1% of its 1.3 billion people, though daily Covid cases on Monday set a record.

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