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IMF forecasts stronger recovery for world economy

Posted: 7th April 2021

The International Monetary Fund is now forecasting a stronger economic recovery this year and next.

The IMF has upgraded both its UK and global forecasts compared with what it projected in January.

But the British economy is still predicted to return to its pre-pandemic level of activity only in late 2022.

The agency also warns that recoveries are diverging dangerously within and between countries.

The new UK forecast is for growth of 5.3% this year and 5.1% in 2022. Both figures are upgrades, though the latter is only marginally higher than the January forecast.

The recovery follows last year’s pandemic driven contraction of 9.9% which was the deepest of any of the G7 major developed economies.

Bringing in the two predicted recovery years, the UK’s performance over 2020 to 2022 would be ahead of one of the G7 countries, Italy.

The new global forecasts are growth of 6% and 4.4% this year and next. Both are upgrades, a fairly modest one for 2022.

That mainly reflects up-rating to the forecast for developed economies, especially the United States.

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Business Comment is the Edinburgh Chamber of Commerce’s bi-monthly magazine. It provides insight on Edinburgh’s vibrant business community, with features on the city’s key sectors, interviews with leading figures and news on new business developments in the capital.
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