Thu. Jul 29th, 2021

The rollout of vaccines for the coronavirus disease 2019 (Covid-19) and vast sums of government aid will accelerate global economic growth to a record high this year in a powerful rebound from the pandemic recession, the International Monetary Fund (IMF) said in its latest forecast.

(Photo Courtesy: IMF)

The 190-country lending agency said Tuesday that it expects the world economy to expand 6 percent in 2021, up from the 5.5 percent it had forecast in January. It would be the fastest expansion for the global economy in IMF records dating back to 1980.

In 2022, the IMF predicts, international economic growth will decelerate to a still strong 4.4 percent, up from its January forecast of 4.2 percent.

“A way out of this health and economic crisis is increasingly visible,” IMF chief economist Gita Gopinath told reporters.

The agency’s economists now estimate that the global economy shrank 3.3 percent in 2020 after the devastating recession that followed the coronavirus’ eruption across the world early last spring. That is the worst annual figure in the IMF’s database, though not as severe as the 3.5-percent drop it had estimated three months ago. Without $16 trillion in global government aid that helped sustain companies and consumers during Covid-19 lockdowns, IMF forecasters say, last year’s downturn could have been three times worse.

The U.S. economy, the world’s biggest, is now forecast to expand 6.4 percent in 2021 — its fastest growth since 1984 — and 3.5 percent in 2022. The U.S. growth is being supported by President Joe Biden’s $1.9-trillion relief package, while an acceleration in the administering of vaccines is beginning to let Americans return to restaurants, bars, shops and airports in larger numbers.

The world’s second-largest economy, China, which imposed a draconian Covid-19 clampdown a year ago and got a head start on an economic recovery, will record 8.4-percent growth this year and 5.6 percent in 2022, the IMF estimates. SOVEREIGNPH

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