After falling 3.5% in 2020, the global economy will grow 5.5% this year, according to forecasts from the International Monetary Fund.
The spread of COVID-19 vaccines will fuel a stronger global economic recovery in 2021, the International Monetary Fund said on Tuesday.
After falling 3.5% in 2020, the worst year since World War II, the global economy will grow 5.5% this year, the 190-country lending organization predicted. The new figure for 2021 is an upgrade from the 5.2% expansion predicted by the IMF in October and would mark the fastest year of global growth since the 2010 financial crisis.
The vaccines are expected to contain the spread of the coronavirus and allow governments around the world to ease lockdowns and encourage a return to normal economic activity. The global economy also benefited from government stimulus packages late last year in the United States and Japan.
But the IMF has also said economies around the world will need the support of their governments to offset the damage caused by the pandemic and warns that coronavirus mutations could cloud the outlook for global health and economic growth.
“Much depends on the outcome of this race between a mutating virus and vaccines and the ability of policies to provide effective support until the end of the pandemic,” IMF chief economist Gita Gopinath said at the time. a press briefing on Tuesday. “There is still enormous uncertainty. ”
In an update to its World Economic Outlook, the IMF said it expects the U.S. economy – the world’s largest – to grow 5.1% this year after s ‘collapse by 3.4% in 2020. In second place, China is expected to register growth of 8.1% after increasing 2.3% in 2020.
The 19 European countries that share the euro will collectively register 4.2% growth this year after seeing economic output crater by 7.2% in 2020, according to the IMF. The Japanese economy is expected to grow 3.1%, reversing a 5.1% decline in 2020.
The IMF has dramatically improved India with a faster than expected recovery of its factories and farms. India’s economy is expected to grow 11.5% in 2021, the fastest of the major economies, and a recovery from the 8% decline in 2020.
The agency also expects global trade to rebound this year, registering 8.1% growth after falling 9.6% last year.