Arrow-right Camera
Go to e-Edition Sign up for newsletters Customer service
Subscribe now

COVID-19

News >  Business

IMF: Vaccines will power 5.5% global economic growth in 2021

UPDATED: Thu., Jan. 28, 2021

Women carry shopping bags, Thursday, Dec. 10, 2020, in New York.   (Associated Press)
Women carry shopping bags, Thursday, Dec. 10, 2020, in New York.  (Associated Press)
By Paul Wiseman Associated Press

WASHINGTON — The spread of COVID-19 vaccines will power a stronger global economic recovery in 2021, the International Monetary Fund forecast Tuesday.

After sinking 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 the IMF forecast in October and would mark the fastest year of global growth since 2007.

The vaccines should contain the spread of the virus and allow governments around the world to ease lockdowns and encourage a return to normal economic activity. The world economy also got a boost from government stimulus programs late last year in the United States and Japan.

But the IMF also says economies worldwide will need support from their governments to offset the damage from 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 pandemic ends,” IMF chief economist Gita Gopinath said at a press briefing Tuesday. “There remains tremendous uncertainty.’’

In an update to its World Economic Outlook, the IMF said that it expects the U.S. economy — the world’s biggest — to expand 5.1% this year after collapsing 3.4% in 2020. No. 2 China is expected to record 8.1% growth after eking out a 2.3% increase in 2020.

The 19 countries European countries that share the euro currency will collectively register 4.2% growth this year after seeing economic output crater 7.2% in 2020, the IMF says. The Japanese economy is forecast to grow 3.1%, reversing a 5.1% decline in 2020.

The IMF gave India a big upgrade, thanks to a faster-than-expected recovery at its factories and farms: The Indian economy is forecast to expand 11.5% in 2021, fastest among major economies, and a turnaround from 2020’s decline of 8%.

The agency also expects global trade to rebound this year: recording 8.1% growth after falling 9.6% last year.

The Spokesman-Review Newspaper

Local journalism is essential.

Give directly to The Spokesman-Review's Northwest Passages community forums series -- which helps to offset the costs of several reporter and editor positions at the newspaper -- by using the easy options below. Gifts processed in this system are not tax deductible, but are predominately used to help meet the local financial requirements needed to receive national matching-grant funds.

Active Person

Subscribe now to get breaking news alerts in your email inbox

Get breaking news delivered to your inbox as it happens.