Fast vaccination drives up the UK economy

Photo: EPA Rishi Sunak

The UK economy would grow faster than previously expected this year on the back of fast vaccination rollout, shows a paper, issued by the International Monetary Fund. The Fund said that the prospects of rich and poor nations diverged more due to differing access to Covid vaccines, BBC elaborated. The forecast for the UK reaches as high as 7% growth of GDP.

Britain is also expected to post the fastest growth of the G7 leading rich countries, together with the US, although that follows a contraction last year that was the deepest in that group. The UK's Chancellor, Rishi Sunak, welcomed what he called "the positive signs that the economy is rebounding faster than previously expected". However, he acknowledged that there were still challenges ahead and said the government would remain focused on protecting and creating as many jobs as possible.

The IMF said there is a division between those countries "that can look forward to further normalisation of activity later this year - almost all advanced economies - and those that will still face resurgent infections and rising Covid death tolls". Its report says that in the rich countries almost 40% of the population is fully vaccinated. In emerging market economies - the more advanced developing nations - it's less than half that, and just a "tiny fraction" in low income countries. For the rich countries together, growth is now predicted to be stronger this year by half a percentage point. But there is an offsetting downgrade for the rest of the world which leaves the global 2021 forecast unchanged at 6%. There is an upgrade next year to 4.9%.

However, the IMF warns that even in countries with very low infection levels, the economic recovery is not assured as long as the virus circulates elsewhere. Another factor fuelling the divergence is the steps taken by governments to support economic recovery. The report calls the effect in the US "sizable" and adds that international action is needed to diminish divergences and strengthen global prospects. It says the immediate priority is to deploy vaccines equitably worldwide.

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