Increased availability of COVID-19 vaccines is expected to fuel a stronger economic recovery worldwide this year, the International Monetary Fund (IMF) predicted Tuesday.
The global economy will grow 5.5% this year, more than the 5.2% expansion the IMF forecast in October, as the vaccines help contain the spread of the coronavirus, enabling governments to ease lockdown measures that last year led to the worst global economic contraction since World War II.
The IMF’s upgraded forecast of a 5.5% global economic expansion this year would mark its fastest year of growth since its sharp 2010 recovery from the financial crisis.
While the vaccines are expected to help power a global economic recovery, the IMF warned that economies worldwide will need support from their governments to offset the damage caused by the pandemic.
The 190-country organization also warns that coronavirus mutations could hinder global economic growth.
Additionally, the IMF’s World Economic Outlook update predicts that U.S. President Joe Biden's proposed $1.9-trillion economic stimulus package could increase U.S. economic output by 5.1% over the next three years after contracting a sharp 3.4% in 2020.
The U.S. economy is the world’s largest, followed by China, which the IMF predicts will achieve a record 8.1% growth after a relatively small 2.3% economic spurt in 2020.
The economies of 19 European countries that use the euro currency will jointly expand 4.2% this year after shrinking 7.2% last year, the IMF said. The lending organization also forecasts that the Japanese economy will expand 3.1% after contracting 5.1% in 2020.
The preliminary report indicates India’s economy will expand 11.5% this year, faster than any of the other major economies, marking a strong recovery from the economy’s 8% decline in 2020.
International trade will grow 8.1% this year after contracting 9.6% in 2020, the IMF said.