The US economy will surpass its pre-pandemic size as growth reaches 6.4% this year, the IMF said, up 1.3 percentage points from the group’s forecast in January. The rebound will help the global economy expand 6% in 2021, an upgrade of 0.5 percentage points from the IMF’s previous outlook. The estimates are broadly in line with Wall Street’s expectations.
“At $1.9 trillion, the Biden administration’s new fiscal package is expected to deliver a strong boost to growth in the United States in 2021 and provide sizable positive spillovers to trading partners,” the IMF said in a report. Other governments and central banks around the world have also pumped trillions into the global economy.
The IMF said the “unprecedented policy response” to the pandemic means the “recession is likely to leave smaller scars than the 2008 global financial crisis.” The group estimates global output dropped 3.3% in 2020, while the US economy shrunk 3.5%.