Euro-area GDP growth received a modest upgrade to 4.4% while forecasts for the United Kingdom and Canada were revised higher as well.
The Washington-based fund's World Economic Outlook also boosted its forecast for the global economy, anticipating vaccine rollouts over the summer that will strengthen economic recovery through the second half of the year. The world output contracted 3.3 per cent in 2020.
This figure was up by 0.2 percentage points from a forecast in January, but trailed the institution's new prediction for the United States, where GDP growth is now expected to hit 6.4 percent, a big revision upwards of 1.3 percent.
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 earlier projected 5.1% growth in 2021.
As for the recovery process in emerging markets, it is expected to be slower than in advanced economies - with significant divergence across countries - as government financing needs have surged and the resulting increase in public debt loads have become a challenge for policymakers as well as the delay in vaccine deployment in those countries. But many others in the group are not expected to do so until well into 2023.
The IMF also highlighted that income inequality would likely increase significantly, mainly due to the pandemic.
Manchin Balks at Biden Corporate Tax Hike
His comments come after Senator Joe Manchin also said Monday that he does not support increasing the corporate tax rate to 28%. He would be more bipartisan in crafting legislation and unifying the country.
As the pandemic caused business and trade shutdowns, the International Monetary Fund calculates that an additional 95 million people are expected to have entered the ranks of the extremely poor in 2020, and there are 80 million more undernourished than before.
There have also been "learning losses", particularly in low-income and developing countries which had to introduce school closures.
"Major central banks should provide clear guidance on future actions with ample time to prepare to avoid taper-tantrum kinds of episodes, " Ms. Gopinath said, referring to 2013, when the Fed's unexpected suggestion that it might tighten policy sent Treasury yields soaring. 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. Higher borrowing costs "in response to large fiscal support" are listed as a key risk, and it could cause chaos in markets and the real economy - bigger bills for indebted companies and households, a crunch in highly priced markets, and a squeeze on Governments as they borrow hand over fist.
Nepal is among 28 countries to receive a debt service relief amounting to Euro 4.299 million (approximately Rs 582 million) through a European Union contribution of Euro 183 million to the Catastrophe Containment Relief Trust (CCRT) set up by the International Monetary Fund (IMF), the EU Delegation to Nepal informs.
"Greater progress with vaccinations can uplift the forecast, while new virus variants that evade vaccines can lead to a sharp downgrade", it said. Countries will again encounter the obstacles they faced before the pandemic, including aging work forces in most rich countries and in China.
That demands worldwide cooperation to ensure widespread vaccination campaigns to address the "deeply iniquitous" vaccine access, where rich countries are scooping up the bulk of the supply.