The COVID-19 pandemic and its related lockdowns have prompted unprecedented fiscal actions to contain its impacts, which amounted to $11.7 trillion, close to 12 percent of global GDP, as of 11 September 2020, the report unveiled.
They made the projection in its "World Economic Outlook", released in its website on Wednesday.
Globally, government deficits are set to surge by an average of 9 percent of GDP, while global public debt is projected to approach 100 percent of GDP, a record high, as a result of the ongoing COVID-19 crisis, according to the report. That's up 0.8 percentage points from the last forecast in June. The UK economy is predicted to grow by 5.9%, which is a -0.4 percentage point downgrade.
The global economy will return to growth of 5.2% in 2021, the International Monetary Fund said, but the rebound will be slightly weaker than forecast in June, partly due to the extreme difficulties for many emerging markets and a slowdown in the reopening of economies due to the continued spread of the virus.
"While the global economy is coming back, the ascent will likely be long, uneven, and uncertain", Gita Gopinath, IMF's director of research, wrote in the report.
"The virus is resurging with localised lockdowns being reinstituted", Gopinath said.
China's GDP expanded 3.2 percent year-on-year in the second quarter, reversing a contraction of 6.8 percent in the first quarter, according to the National Bureau of Statistics.
The IMF is not the only worldwide organization that has raised its forecast for China.
The five nations with the highest Covid-19 death counts - US, Brazil, India, Mexico and United Kingdom - are forecast to suffer a total GDP decline of almost $1.8 trillion in nominal terms and $2.1 trillion after having been adjusted for differences in purchasing power.
More is needed to boost the medical response to the pandemic and support economies as they try to recover. China will continue to build an open economy and is willing to boost economic policy coordination with other countries to contribute to stabilization and recovery, the ministry said. However, in order to sustain the growth, policymakers need to remain accommodative.
"This is the worst crisis since the Great Depression, and it will take significant innovation on the policy front, at both the national and global levels to recover from this Great Lockdown", she added.
"The revision is driven by second-quarter GDP outturns in large advanced economies, which were not as negative as we had projected", she added, citing China's stronger-than-expected return to growth as a key driver.
He affirmed that the government will continue implementing an integrated package of structural reforms to strengthen the macroeconomic structure, in a way that contributes to achieving economic targets by registering a primary surplus and raising economic growth rates, in a manner that helps preserve economic gains.
Given ongoing uncertainty over how quickly the COVID-19 pandemic can be brought under control, the International Monetary Fund warned that policymakers need to be prepared to continue to provide broad support, and gradually withdraw it only once the pandemic is fully under control.