It
said multiple vaccine approvals and the launch of vaccinations
in some countries in December had boosted hopes of an eventual
end to the pandemic that has now infected nearly 100 million
people and claimed the lives of over 2.1 million globally.
But it warned that the world economy continued to face
"exceptional uncertainty" and new waves of COVID-19 infections
and variants posed risks, and global activity would remain well
below pre-COVID projections made one year ago.
Close to 90 million people are likely to fall below the extreme
poverty threshold during 2020-2021, with the pandemic wiping out
progress made in reducing poverty over the past two decades.
Large numbers of people remained unemployed and underemployed in
many countries, including the United States.
In its latest World Economic Outlook, the IMF forecast a 2020
global contraction of 3.5%, an improvement of 0.9 percentage
points from the 4.4% slump predicted in October, reflecting
stronger-than-expected momentum in the second half of 2020.
It predicted global growth of 5.5% in 2021, an increase of 0.3
percentage points from the October forecast, citing expectations
of a vaccine-powered uptick later in the year and added policy
support in the United States, Japan and a few other large
economies.
It said the U.S. economy - the largest in the world - was
expected to grow by 5.1% in 2021, an upward revision of 2
percentage points attributed to carryover from strong momentum
in the second half of 2020 and the benefit accruing from $900
billion in additional fiscal support approved in December.
The forecast would likely rise further if the U.S. Congress
passes a $1.9 trillion relief package proposed by newly
inaugurated President Joe Biden, economists say.
China's economy is expected to expand by 8.1% in 2021 and 5.6%
in 2022, compared with its October forecasts of 8.2% and 5.8%,
respectively, while India's economy is seen growing 11.5% in
2021, up 2.7 percentage points from the October forecast after a
stronger-than-expected recovering in 2020.
The Fund said countries should continue to support their
economies until activity normalized to limit persistent damage
from the deep recession of the past year.
Low-income countries would need continued support through
grants, low-interest loans and debt relief, and some countries
may require debt restructuring, the IMF said.
(Reporting by Andrea Shalal; Editing by Shri Navaratnam)
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