IMF projects India's growth rate to jump to impressive 12.5% in 2021

The IMF is now projecting a stronger recovery for the global economy, at six per cent in 2021, compared with 5.5 per cent it predicted in January.

Pointing to uneven recovery within countries, she wrote the unskilled, young and women were more impacted.

Buoyant exports of high-tech products and resilient investment in machinery and equipment are expected to lift up the economy which contracted 1 percent a year ago. The average annual loss in per capita GDP over the 2020-24 period relative to pre-pandemic forecasts is expected to be 5.7% in low-income countries and 4.7% in emerging markets, For advanced economies, this number is a lower: 2.3%.

China will contribute more than one-fifth of the total increase in the world's gross domestic product in the five years through 2026, according to Bloomberg calculations based on International Monetary Fund forecasts published Tuesday.

The upward revision, Gopinath said, reflects improved external environment, with stronger global growth and US COVID-19 relief package, which have increased the demand for China's products.

The fund said the world economy contracted 3.3% in 2020, a modest upgrade from an estimated contraction of 3.5% in its January update. Thanks to the ingenuity of the scientific community, hundreds of millions of people are being vaccinated and this is expected to power recoveries in many countries later this year.

"Higher debt service costs are also expected to constrain their ability to address social needs, including rising poverty and growing inequality, or to correct the setback in human capital accumulation during the crisis", it said.

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These divergent recovery paths were likely to create wider gaps in living standards across countries when compared with pre-pandemic expectations.

"First and foremost, countries need to work together to ensure universal vaccination", Gopinath said. Many have less access to vaccines, and they also tend to find it more hard to finance economic and health policy actions.

The economic outlook report said that in advanced economies like the United Kingdom, the vulnerable population is getting vaccinated and contact-intensive activities are expected to resume.

However, unlike after the 2008 crisis, it is emerging markets and low-income countries that are expected to suffer greater scarring given their more limited policy space, it said. It says people counted as extremely poor are likely to have increased by 95 million previous year, with a rise of 80 million in the number who are undernourished. The economic downturn, especially in low-income countries, may have caused an additional 95 million people to enter the ranks of the extreme poor in 2020, compared with pre-pandemic projections, according to the International Monetary Fund.

The Washington-based lender also sees a significantly brighter picture for the USA than it did just a few months ago.

The pandemic has also had an impact on workers whose jobs are vulnerable to automation.

But the health crisis remains the key issue, underlining "the importance of proceeding with the vaccination campaigns and making sure that those shots going deep into the arms as quickly as possible".

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