The United States may just become the engine of global economic growth this year, according to a new forecast released Tuesday by the International Monetary Fund.
The IMF expects the U.S. economy will grow 6.4% this year, its strongest growth in decades. That's faster than the 5.1% growth it was projecting just two months ago and nearly double the growth rate it predicted in October.
IMF forecasters credit the rapid rollout of COVID-19 vaccines in the United States, along with trillions of dollars in relief spending that Congress passed for helping to boost growth prospects at home and worldwide.
The organization now expects the global economy to grow by 6% this year, up from 5.5% forecast in January.
"Thanks to the ingenuity of the scientific community, hundreds of millions of people are being vaccinated, and this is expected to power recoveries in many countries later this year," IMF chief economist Gita Gopinath said. "Additional fiscal support in large economies — particularly the United States — has further improved the outlook."
Still, Gopinath stressed that the outlook remains uncertain and warned of stark differences in the speed at which countries recover from the pandemic.
"These diverging recovery paths are likely to create wider gaps in living standards across countries compared to pre-pandemic expectations," Gopinath said.
The IMF calculates that the global economy shrank by 3.3% last year — the worst downturn in records dating back to 1980. Gopinath said the downturn could have been three times as bad, had it not been for aggressive relief efforts in rich countries such as the United States.
As it was, the pandemic recession pushed an estimated 95 million people into severe poverty worldwide.
The IMF urged the international community to ramp up production and distribution of COVID-19 vaccines as quickly as possible. While every adult in the United States is expected to have access to the vaccine this summer, people in other countries could be waiting until the end of next year, or longer.
"First and foremost, countries need to work together to ensure universal vaccination," Gopinath said. "Without additional effort to give all people a fair shot, cross-country gaps in living standards could widen significantly, and decades-long progress in global poverty reduction could reverse."