IMF says UK will have joint fastest growth in the G7 this year after huge upgrade as Rishi Sunak hails 'positive signs' economy is bouncing back
The UK is set for the joint fastest growth in the G7 this year as the country bounces back from the devastation of Covid-19, the IMF said today.
The international body gave Britain as huge upgrade after the success of the vaccination drive, saying economic output should increase 7 per cent this year.
That was a large jump from the 5.3 per cent it predicted as recently as April - and means only the US is expected to expand as quickly.
Rishi Sunak hailed 'positive signs' about the bounceback from the pandemic, despite warning that there are still major challenges ahead.
However, the bumper growth is in the context of one of the worst drops among developed nations last year.
The UK is set for the joint fastest growth in the G7 this year as the country bounces back from the devastation of Covid-19, the IMF said today
UK GDP tumbled by 9.8 per cent in 2020, whereas America only saw a 3.5 per cent fall.
Germany is on track to grow 3.6 per cent in 2021, Italy 4.9 per cent, and France could manage 5.8 per cent.
Economists downgraded their growth predictions for the UK next year by 0.3 per cent, but that still leaves a healthy 4.8 per cent.
Mr Sunak said: 'There are positive signs that our economy is rebounding faster than initially expected, with the IMF forecasting the UK to have the joint highest growth rate in 2021 among the G7 economies.
'That said, we still face challenges ahead as a result of the impact of the pandemic, which is why we remain focused on protecting and creating as many jobs as possible through our Plan for Jobs.'
The IMF's latest World Economic Outlook also highlighted a widening gap between richer and poorer countries as they look to recover from the pandemic.
'Growth prospects for advanced economies this year have improved by 0.5 percentage points, but this is offset exactly by a downward revision for emerging market and developing economies driven by a significant downgrade for emerging Asia,' said Gita Gopinath, the body's chief economist.
Advanced economies are also expected to see a stronger recovery next year, she added.
The estimates highlight global inequality, not least as nearly 40 per cent of people in advanced economies have been fully vaccinated, compared with just 11 per cent in emerging markets and a 'tiny fraction' in low-income developing countries.
Meanwhile, per capita income has dipped just 2.8 per cent in advanced economies, compared with 6.3 per cent for emerging market and developing economies, excluding China, according to IMF estimates.
Rishi Sunak hailed 'positive signs' about the bounceback from the pandemic, despite warning that there are still major challenges ahead