Emirates: The International Monetary Fund (IMF) on Tuesday revised upward the UAE and global economic growth forecast for 2021, thanks to massive vaccination efforts as well as $1.9 trillion US stimulus package which will strengthen recovery in the second half of this year.

The IMF Fund more than doubled the UAE’s 2021 growth projection from 1.3 per cent in October 2020 to 3.1 per cent in its latest World Economic Outlook report released on Tuesday. The fundFund sees the UAE’s growth softening to 2.6 per cent next year.

The IMF credited approval of multiple Covidd-19 vaccines that can reduce the severity and frequency of infections for improved outlook of the UAE and global economy. The UAE is now the second most vaccinated country in the world after Israel.

For the Middle East and Central Asia region, the IMF revised upward growth outlook to 3.7 per cent for 2021 from 3.0 per cent. For the Middle East and North Africa region, itthe Fund revised upward the 2021 growth outlook from 3.2 per cent to 4.0 per cent.

Stronger global recovery

IMF projected a stronger recovery for the global economy this year and the next.

“We are now projecting a stronger recovery in 2021 and 2022 for the global economy compared to our previous forecast, with growth projected to be 6 per cent in 2021 and 4.4 per cent in 2022. Nonetheless, the outlook presents daunting challenges related to divergences in the speed of recovery,” said Gita Gopinath, chief economist at IMF.

Nonetheless, the outlook presents daunting challenges related to divergences in the speed of recovery

The Fund had projected 5.2 per cent growth for global economy for 2021 in its previous forecast released in October 2020.

“Thanks to the ingenuity of the scientific community, we have multiple vaccines that can reduce the severity and frequency of infections,” said Gopinath.

Among major economies, the US is expected to surpass its pre-Covid GDP level this year, while many others in the group will return to their pre-Covid levels only in 2022.

Similarly, among emerging market and developing economies, China had already returned to pre-Covid-19 GDP in 2020, whereas many others are not expected to do so until well into 2023.