The IMF predicts economic growth for the UK will rise to 5% over the next year, pointing to the success of the vaccine rollout.
- After a year of pretty incessant bad news, we're now starting to get some good news, both about vaccinations, but also about the state of the global economy. The International Monetary Fund giving us its latest update. And just have a look at what it says is going to happen for UK economic growth. You can see, and you'll probably be familiar with what happened in 2020, very big fall, down by almost 10%.
But look. In this year, they say over 5%, 5.3% growth, and then next year, over 5% growth as well. And when you compare the UK with other countries around the world, well, have a look at where we are. So the worst growth of the G7, so industrialized seven, industrialized leading economies in 2020, more or less middle of the pack in 2021. And that actually the strongest growth of all of those G7 nations in 2022.
But it's worth just looking at the level of GDP growth, because you get more of a sense of where we've come from and where we're heading from that. So for instance, the line here just shows you where we were in 2019, so before the pandemic, down a lot in 2020. And then gradually getting back up to that peak by 2022. So regaining the peak.
But when you compare the UK with other countries around the world, those G7 nations, well, look. Some of them get back up to that peak a lot earlier, the US, Canada, France. In fact, the UK the second slowest to get back to where it was before the pandemic hit. But that's not just the only way of looking at it. You can also look at scarring. So long-term damage from COVID-19. A lot of speculation as to whether there is going to be that long-term damage.
And the way to do that, is to compare where, for instance, the IMF thought that we were going to be in 2024, so some way after the pandemic, before it hit, with what it now thinks. And anything below this line shows you scarring, long-term damage. And we can look at different parts of the economy here. Emerging economies, they are talking potentially about scarring 4.2%. So permanent medium term damage of 4.2% on the level of GDP. The world down by 2.8%, so that's scarring for the global economy.
China down by 1.6%. So a lot of people thought China was going to do pretty well out of this period. But actually, some scarring of 1.6% to its level of growth and then to a level of GDP. And then advanced economies actually much less scarring than China and other parts of the world. And look at this. The US, no scarring. In fact, 0.5% stronger than was expected before the pandemic hit. So actually, it's been good news for some parts of the economy in the long run in terms of the amount of scarring, but much less good news for other parts of the world.