IMF estimates 6 percent global growth this year

IMF estimates 6 percent global growth this year
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The International Monetary Fund (IMF) on Tuesday said that it projects the global economy will grow 6 percent this year.

The top-line estimate is the same as the IMF's April projection, but reflects the fact that the IMF has upgraded its forecast for advanced economies, such as the United States, while it has lowered its forecast for emerging markets and developing countries.

"Economies are diverging even further, influenced by differences in the pace of vaccine rollout and policy support," the IMF wrote in a report. "However, smooth and durable recoveries are not assured even in places where infections are seemingly under control." 

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The IMF projected that overall the global economy will grow this year after it contracted by 3.2 percent in 2020 as a result of the coronavirus pandemic.

The IMF estimated that advanced economies' output will increase by 5.6 percent in 2021, up from its April estimate of 5.1 percent, in part because it expects Congress to pass legislation to make investments in infrastructure and the social safety net, boosting U.S. economic growth.

On the other hand, the IMF reduced its estimate for 2021 growth in emerging markets and developing economies, from 6.7 percent in April to 6.3 percent in its new report. The lowered projection was due in large part to downgraded estimates for growth in emerging Asian countries that have been hampered by recent coronavirus infection waves, the IMF said.

"Concerted, well-directed policy actions at the multilateral and national levels can make the difference between a future where all economies experience durable recoveries and one where fault lines widen further—as many struggle with the health crisis for an extended period while a handful see conditions normalize, albeit with the constant threat of renewed flare-ups," the IMF wrote.