Vaccine key to recovery worldwide, IMF says

WASHINGTON — The spread of COVID-19 vaccines will power a stronger global economic recovery in 2021, the International Monetary Fund forecast Tuesday.

After sinking 3.5 percent in 2020, the worst year since World War II, the global economy will grow 5.5 percent this year, the 190-country lending organization predicted. The new figure for 2021 is an upgrade from the 5.2 percent expansion the IMF forecast in October and would mark the fastest year of global growth since the 2010 snapback from the financial crisis.

The vaccines should contain the spread of the virus and allow governments around the world to ease lockdowns and encourage a return to normal economic activity. The world economy also got a boost from government stimulus programs late last year in the United States and Japan.

But the IMF also says economies worldwide will need support from their governments and warns that coronavirus mutations could cloud the outlook for global health and economic growth.

“There remains tremendous uncertainty,” said IMF chief economist Gita Gopinath.

In an update to its World Economic Outlook, the IMF said it expects the U.S. economy — the world’s biggest — to expand 5.1 percent this year after collapsing 3.4 percent in 2020. No. 2 China is expected to record 8.1 percent growth after eking out a 2.3 percent increase in 2020.