US, China lead global economic rebound

China and the US will continue to outpace other major economies in recovering from the pandemic, the IMF says in its latest outlook on the global economy and commodities demand.

Global GDP will grow by 6pc in 2021 after falling by 3.3pc in 2020, the IMF said in the latest update to its World Economic Outlook released today — a 0.5 percentage point upgrade over its January forecast.

Global economic growth is then projected to ease off to 4.4pc in 2022, up by 0.2 percentage points from the previous forecast. IMF forecasts are used by many economists, including those at the IEA, to model key oil demand projections.

"Even with high uncertainty about the path of the pandemic, a way out of this health and economic crisis is increasingly visible," IMF head of research Gita Gopinath said. The upgrade reflects further stimulus measures in the US and elsewhere, expanding Covid-19 vaccination efforts, better adapting to the new ways of labor force functioning with reduced mobility.

But the projected economic recovery is unevenly distributed — as is the vaccination effort. The addition to global growth is expected to come mostly from the advanced economies, especially the US. The IMF expects the US GDP to grow by 6.4pc this year — an upgrade of 1.3 percentage points as a result of President Joe Biden's $1.9 trillion stimulus plan that Congress enacted last month. The US as a result will be the only one among the advanced economies group where the GDP in 2022 will exceed the level it was projected to have before the pandemic.

China's economy returned to pre-pandemic levels last year and is projected to grow by a further 8.4pc this year. Most other major economies will not return to their pre-pandemic size until 2023 at the earliest.

Saudi Arabia's GDP is projected to increase by 2.9pc this year. The combined GDP of the oil exporting countries of the Middle East, north Africa and central Asia is expected to increase by 4.6pc this year after a 4.2pc decline in 2020. Iran is among the few economies in the region and globally to have recorded economic growth in 2020, and its GDP is forecast to increase by 2.5pc this year.

By Haik Gugarats