The IMF expects a stronger global recovery and has revised the growth outlook from 5.5% to 6% in 2021.
Similarly, the multilateral institution upwardly revised the growth outlook for South Africa, from 2.8% to 3.1%.
Data published by Statistics South Africa in March showed that South Africa's economy contracted by 7% a year ago.
"Additional fiscal support in some economies, (especially the United States)-on top of an already unprecedented fiscal response previous year and continued monetary accommodation-further uplift the economic outlook", the IMF said. The World Bank expects the SA economy to grow to 3% in 2021.
India is the only country expected to register a double-digit growth this fiscal.
Global growth is expected to moderate to 3.3 per cent over the medium term, reflecting projected damage to supply potential and forces that predate the pandemic, including aging-related slower labour force growth in advanced economies and some emerging market economies.
The IMF said that global growth is projected to be 6% in 2021 and 4.4% in 2022, after an estimated historic contraction of -3.3% in 2020. However, emerging markets and low income countries are expected to suffer more medium-term than their high income counterparts, according to the International Monetary Fund.
"Thanks to unprecedented policy response, the Covid-19 recession is likely to leave smaller scars than the 2008 global financial crisis", it said. The area suffered a contraction of -1.9% in 2020 but is expected to rebound to 3.4% in 2021 - lower than what was anticipated before the pandemic. "Output losses have been particularly large for countries that rely on tourism and commodity exports and for those with limited policy space to respond". "While China's economy had already returned to pre-pandemic GDP in 2020, many other countries are not expected to do so until 2023", Gopinath said.
The IMF cautioned that the economic outlook remains fraught with "high uncertainty", warning that new virus variants could force downgrades. Such losses were reversing gains in poverty reduction, with an additional 95 million people expected to have entered the ranks of the extreme poor in 2020 when compared with pre-pandemic projections. "Unequal setbacks to schooling could further amplify income inequality". New strains of the coronavirus could emerge and prolong the pandemic if vaccines prove ineffective against them, the International Monetary Fund warned.
The IMF suggested that policymakers prioritise prudent policies in the face of uncertainty.
Still, the fund is recommending that countries with the ability to spend continue to support policy measures like unemployment insurance and stimulus checks through the economic reopening. With multi-speed recoveries, a tailored approach is necessary, with policies well-calibrated to the stage of the pandemic, the strength of the economic recovery, and the structural characteristics of individual countries, she said.
"Right now, the emphasis should be on escaping the health crisis by prioritising health care spending, on vaccinations, treatments, and health care infrastructure".
Gopinath said it had been a year into the Covid-19 pandemic and the global community was still confronted by extreme social and economic strains, as human toll rose and millions remained unemployed.
The IMF also called for strong global cooperation - not only to narrow the gap in living standards of low-income developing countries but also to ensure the universal distribution of vaccines, at affordable prices. "While some countries will get to widespread vaccinations by this summer, most, especially low-income countries will likely have to wait until end-2022".
"The global community also needs to work together to ensure that financially constrained economies have adequate access to worldwide liquidity so that they can continue needed health care, other social, and infrastructure spending required for development and convergence to higher levels of income per capita", the IMF report said.