THE International Monetary Fund (IMF) on Tuesday said recent vaccine approvals have raised hopes of an economic turnaround with global growth projected at 5.5 per cent in 2021 and 4.2 per cent in 2022.

The increased availability of COVID-19 vaccines led to a 0.3 percentage point revision, from 5.2 per cent, in the IMF's 2021 forecast which had released in October, said the latest World Economic Outlook report.

"Although recent vaccine approvals have raised hopes of a turnaround in the pandemic later this year, renewed waves and new variants of the virus pose concerns for the outlook," the global body warned, adding "The 2021 forecast is revised up 0.3 percentage point relative to the previous forecast, reflecting expectations of a vaccine-powered strengthening of activity later in the year and additional policy support in a few large economies."

The projected growth follows a severe collapse in 2020, the worst global economic contraction since World War II. Last year's decline had an acute adverse impact on women, youth, low-income groups, informally employed and those who work in contact-intensive sectors, said the IMF.

The global growth contraction for 2020 is estimated at-3.5 per cent, 0.9 percentage point higher than projected in the previous forecast after stronger-than-expected momentum in the second half of 2020.

The IMF's upgraded forecast of a 5.5 per cent expansion would mark the global economy's fastest year of growth since the 2010 recovery from the financial crisis.

While the vaccines are expected to help power a global economic recovery, the IMF warned that it will vary significantly across countries depending on access to medical interventions, effectiveness of policy support, exposure to cross-country spillovers and the renewed waves of the virus.

Economies worldwide will need support from their governments to offset the damage caused by the pandemic.

"Policy actions should ensure effective support until the recovery is firmly underway, with an emphasis on advancing key imperatives of raising potential output, ensuring participatory growth that benefits all, and accelerating the transition to lower carbon dependence," the 190-country organisation recommended, calling for a green investment push coupled with rising carbon prices.

Additionally, the preliminary report indicates India's economy will expand 11.5 per cent this year, faster than any of the other major economies, followed by China's record 8.1 per cent growth.

It predicts that strong multilateral cooperation is required to bring the pandemic under control and ensuring universal distribution of the COVID-19 vaccines.