The pandemic could slam the brakes on a global economic turnaround despite mass vaccination and unprecedented levels of stimulus, according to the International Monetary Fund.
The IMF expects the global economy to grow by 5.5 percent this year. The upgrade reflects “expectations of a vaccine-powered strengthening of activity later in the year and additional policy support in a few large economies,” the group said.
The IMF estimates that the world economy shrank by 3.5 percent in 2020, its biggest peacetime contraction since the Great Depression.
But it also warned that surging infections in late 2020, renewed lockdowns and logistical problems with vaccine distribution could hamstring growth. If new variants of the coronavirus also prove difficult to contain, global output this year would be 0.75 percent less than the IMF expects.
Looking further ahead, the IMF expects global growth to slow to 4.2 percent in 2022.