The International Monetary Fund, or IMF, is a specialized agency of the United Nations. The IMF promotes international financial stability and monetary cooperation among countries.
The IMF assesses the world economy and the economies of specific countries, reports on its growth prospects, and reports on financial stability.
In 2020, the global economy suffered because of closed borders, restrictive measures within states, and declining tourism revenues. In most countries, GDP fell to negative levels. But at the end of the year, the situation began to improve: countries strengthened fiscal policy and developed a strategy to support the population.
2020 results and global economic growth forecast from the IMF
The graph shows that global GDP declined in 2020. This is the largest contraction since the Great Depression of the 1930s. But the economy will reach pre-crisis levels in late 2021, the IMF believes. The growth rate of the economy is also the highest in 40 years.
The IMF stresses that the forecast may change, for better or for worse. Economic growth may be hindered by financial crises, natural disasters, worsening geopolitical tensions and a slowdown in GDP growth in major countries, such as the U.S. or China.
Forecast for 2021 for advanced economies
Economic recovery varies by country. The GDP of countries with developed economies grows faster. The growth is influenced by the speed of mass vaccination, financial support by the state for its citizens.
IMF also notes that economies have become better able to cope with restrictions imposed because of the coronavirus. Therefore, states will cope with the pandemic crisis faster than with the global financial crisis of 2008.
Dynamics of GDP in advanced economies
|Country||Result in 2020||Forecast for 2021||China||+ 2,3%||+ 8,4%|
|USA||- 3,5%||+ 6,4%|
|Spain||- 11%||+ 6,4%|
|France||- 8,2%||+ 5,8%|
|Great Britain||- 9,9%||+ 5,3%|
The US and China are the leaders of the world economy. The economic level of all countries will also depend on the growth rate of their GDP. So far, the growth rate is high.
The US Institute for Supply Management notes that the index of national manufacturing activity rose to 64.7. This is the highest level since 1983.
China’s economy is supported by effective containment measures, deferral of mortgage and loan payments, and central bank liquidity support.
How the economic situation has affected countries with investment programs
The economies of most countries with citizenship or residency investment programs depend on tourism. For example, up to 14% of the GDP of Caribbean countries consists of tourist income.
Investment programs give an opportunity to improve the economic situation faster. The inflow of foreign investment is an additional financial support.
GDP dynamics of some European countries
Montenegro showed one of the worst results in 2020, but its economy is also growing faster than other countries. The reason is that the government allowed tourists to enter freely in the summer. For example, Russians could enter the country from August.
Turkey has shown better results – the country’s economy began to grow at the end of 2020. The government reduced interest rates on loans and granted tax vacations to citizens.
The determining factors affecting the UK economy this year will continue to be the response to the coronavirus pandemic and new strains of coronavirus.
In the UK, a construction boom has begun: deferred commercial construction and tourist infrastructure projects have resumed. Because of this, housing prices rose by 8.6%.
Malta was actively rebuilding its economy for several years before the pandemic. The country is rebuilding itself to export goods and services, making good use of financial aid from the European Union.
Portugal is waiting for tourism to resume, GDP figures to start growing as countries open the border and lift some restrictions related to the coronavirus.
Greece is pursuing sustainable economic development goals, improving tax laws and fighting corruption.
GDP dynamics in the five Caribbean countries and Vanuatu
Caribbean economies will begin to grow strongly when the borders are opened. It will take several years to compensate for the losses of the pandemic. The Caribbean Development Bank presented an exit plan in March 2021. We also told you what economic forecast the Caribbean Bank gave.
Vanuatu was strongly supported by the Citizenship Investment Program, which helped the region’s economy grow in early 2021. The program remained in demand even during the crisis amid the pandemic. And Vanuatu earned $106 million from investors in 2020.
The crisis has not affected the number of applicants to the Vanuatu program for two reasons: the speed of processing and the relatively low cost.
The Vanuatu passport is a sought-after travel document that opens up the world to cosmopolitans without visas or bureaucracy.
Director of Sales, Immigrant Invest