The IMF projects global growth of 6 percent in 2021, moderating to 4.4 percent in 2022. (see attached table). The projections for 2021 and 2022 are stronger than in the October 2020 WEO. The upward revision reflects additional fiscal support in some large economies, anticipated vaccine-driven recovery in the second half of 2021, and continued adaptation of economic activity to moderate mobility. This outlook surrounds a great deal of uncertainty, related to the trajectory of the pandemic, the effectiveness of policy support in providing a bridge to vaccine-driven normalization, and evolving financial conditions.

President Biden's infrastructure plan will provide another boost to an already accelerating economy. The 916,000 increase in payroll jobs in March should set the stage for much larger gains in the coming months. Most other G10 economies also appear to be putting the worst of the winter slowdown behind them, judging by the improvement in PMIs and other business surveys in February and March.

In Europe and much of the emerging world, market participants underestimate the likely pace of improvement in both the public health situation and economic activity in the remainder of 2021. Therefore, they can be expected to converge on a solid and relatively balanced picture of global economic recovery in the coming months.

Meanwhile, the March PMIs point to upside risks to growth. After a surprisingly modest drop in response to the second wave of the pandemic around the turn of the year, growth in economic activity appears to have picked up rapidly during the first quarter, finishing at a solid pace. After falling just one point from its peak expansion in October to a still solid 52.3 in January, the overall all-industry PMI has climbed back up 2.5 points to a nearly seven-year high in March. At 54.8, the composite reading is consistent with 3.5% ar growth in global GDP, while the quarterly average points to 3% growth. (see attached chart).

IMF growth estimates    

  PMI vs World GDP