IMF upgrades world economic outlook for 2021

The International Monetary Fund (IMF) raised its latest growth forecast for global economy by 0.3% from its earlier forecast of 5.2% revealed in October. Accordingly, the global GDP is projected to grow by 5.5% in 2021 and 4.2% in 2022.

The upward revision was mainly driven by the optimism created by the recent vaccine rollouts, yet the IMF warned that renewed global lockdowns and a new strain of the virus continue to pose a risk to the possible economic recovery.

The pace of economic recovery will vary depending on countries’ ability to contain the virus as well as their effectiveness of policy support.

On a country-based breakdown, the fund expects the Chinese economy to grow by 8.2% in 2021 and 5.6% in 2022. Furthermore, India’s economy is forecast to expand by 11.5% this year, which is larger than the earlier growth forecast of 8.8%.

2021 forecast for the US was upgraded to a growth of 5.1% while the Euro area is expected to expand by 4.2% in 2021 and 3.6% next year.

Lastly, the IMF’s projections for the Middle East and Central Asia were raised to a growth of 3% in 2021 and 4.2% in 2021.