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An employee works at the production line Volvo's Torslanda production plant in Gothenburg, Sweden, on Aug. 27, 2020.

JONATHAN NACKSTRAND/AFP/Getty Images

The rollout of COVID-19 vaccines and vast sums of government aid will accelerate global economic growth to a record high this year in a powerful rebound from the pandemic recession, the International Monetary Fund says in its latest forecasts.

The 190-country lending agency said Tuesday that it expects the world economy to expand 6 per cent for 2021, up from the 5.5 per cent it had forecast in January. It would be the fastest expansion for the global economy in IMF records dating to 1980.

In 2022, the IMF predicts, international economic growth will decelerate to a still strong 4.4 per cent, up from its January forecast of 4.2 per cent.

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The agency’s economists now estimate that the global economy shrank 3.3 per cent in 2020 after the devastating recession that followed the coronavirus’ eruption across the world early last spring. That is the worst annual figure in the IMF’s database, though not as severe as the 3.5 per cent drop it had estimated three months ago. Without heavy government aid that helped sustain companies and consumers during COVID-19 lockdowns, IMF forecasters say, last year’s downturn could have been three times worse.

The U.S. economy, the world’s biggest, is now forecast to expand 6.4 per cent in 2021 – its fastest growth since 1984 – and 3.5 per cent in 2022. The U.S. growth is being supported by President Joe Biden’s $1.9 trillion relief package, while an acceleration in the administering of vaccines is beginning to let Americans return to restaurants, bars, shops and airports in larger numbers.

The world’s second-largest economy, China, which imposed a draconian COVID-19 clampdown a year ago and got a head start on an economic recovery, will record 8.4 per cent growth this year and 5.6 per cent in 2022, the IMF estimates.

The monetary fund expects the 19 countries that share the euro currency to collectively expand 4.4 per cent this year and 3.8 per cent in 2022. Japan is expected to register 3.3 per cent growth this year and 2.5 per cent next year.

In the IMF’s estimation, the global rebound will gradually lose momentum and return to pre-COVID levels of just above 3 per cent growth. Countries will again encounter the obstacles they faced before the pandemic, including aging work forces in most rich countries and in China.

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