IMF ups its global growth target for second time in three months

London, (Quantum Commodity Intelligence) - The International Monetary Fund (IMF) has increased its estimate for global economic growth to 6% this year compared with a 5.5% forecast in January.

The IMF said half of the increase in economic growth was owing to the US's stimulus package and the other half was due to economies adjusting to the pandemic.

The fund said developed countries would be less impacted than previously feared amid a rapid vaccination rollout in the US and the UK.

Advanced economies are expected to grow 5.1%, with the US leading the way with growth of 6.4%.

Nevertheless, the fund was cautious about a rebound in economic activity.

"The outlook presents daunting challenges related to divergences in the speed of recovery both across and within countries and the potential for persistent economic damage from the crisis," the IMF's chief economist Gita Gopinath said in the World Economic Outlook report.

The IMF said the global economy shrunk by 3.3% last year - the worst contraction in peacetime.

The fund called for governments to scale back intervention gradually, just days after US lawmakers approved a huge $1.9 trillion stimulus package.

The IMF estimates growth to be 4.4% next year, up from its previous forecast of 4.2%.

Economic growth and oil demand are strongly correlated.