April 6 (UPI) — The global economy is expected to bounce back impressively after contracting in 2020 because of the COVID-19 pandemic and restrictions, but significant uncertainties remain, the new World Economic Outlook report released Tuesday predicts.
The International Monetary Fund released the outlook, cautioning that while various coronavirus vaccines will help economies around the world return to normal, new variants of the virus continue to recreate concern.
“Economic recoveries are diverging across countries and sectors, reflecting variation in pandemic-induced disruptions and the extent of policy support,” the report’s overview said. “The outlook depends not just on the outcome of the battle between the virus and vaccines. It also hinges on how effectively economic policies deployed under high uncertainty can limit lasting damage from this unprecedented crisis.”
The report said global economic growth, lead by China and the United States, will jump 6% this year and moderate to 4.4% in 2022, an improved outlook from what the IMF had projected last October. It said the $1.9 trillion stimulus package in the United States played a role in that improved outlook.
“The upward revision reflects additional fiscal support in a few large economies, the anticipated vaccine-powered recovery in the second half of 2021, and continued adaptation of economic activity to subdued mobility,” the report said.
In the report, the United States’ economy was projected to grow 6.4% this year and 3.5% in 2022 while China’s economy was expected to expand 8.4% in 2021 and 5.6% the year after. India’s economy, after losing 8% in 2020, was expected to grow 12.5% in 2021 and 6.9% in 2022.
The report also predicted France’s economy to grow 5.8% this year, Britain’s economy by 5.3%, Canada by 5% and Germany’s by 3.6%.
The report said employment levels of younger and lower-skilled workers will continue to be affected since the pandemic accelerated the move to automation for some of those positions. It said worker reallocation measures will need to be applied to mitigate those changes.