The International Monetary Fund predicts world growth jumping to 6% this year compared with a 3.3% contraction in 2020.
The increase is a result mainly of public spending to fight COVID-19 and its economic effects.
The fund said this is the fastest international growth rate since the 1970s. A positive outlook for the U.S. economy is another reason for the boost in its previous estimates.
The fund expects 6.4% growth for the U.S. economy this year - the fastest since the early 1980s. It earlier estimated U.S. growth at 5.1%.
Among advanced economies, the U.S. is expected to exceed its precoronavirus gross domestic product this year. Other advanced economies will return to pre-COVID levels in 2022.
China's gross domestic product forecast for 2021 was raised to 8.4%, up 0.3%, an increase mostly owing to external demand for its exports driven largely by U.S. stimulus spending. On the other hand, consumer spending in China remains weak. And, as in past years, China's growth is again primarily being driven by public investments. China recaptured all of its lost growth by the end of 2020.
Fund chief economist Gita Gopinath credited the improvement to increased economic support - including a massive $1.9 trillion U.S. aid package. "Even with high uncertainty about the path of this pandemic, a way out of this health economic crisis is increasingly visible," Gopinath said.
She said the pandemic was still far from defeated and cases continue to rise in many countries. "Recoveries are diverging dangerously across and within countries, as economies with slower vaccine rollout, more limited policy support and more reliance on tourism do less well," Gopinath said.
The fund's forecast for growth in emerging and developing economies is 6.7% for 2021, with India expected to expand by 12.5%.
"Income inequality will likely increase because young workers and those with relatively lower skills remain more heavily affected in not only advanced but also emerging markets and developing economies," Gopinath said.
Governments should continue to concentrate on "escaping the crisis" by providing economic support, including for their health care systems. Politicians will "need to limit long-term economic scarring" from the crisis and boost public investments.
"Without additional efforts to give all people a fair shot, cross-country gaps in living standards could widen significantly, and decadeslong trends of global poverty reduction could reverse," according to Gopinath.
The fund estimates world gross domestic product for 2022 will increase by 4.4% from an earlier estimate of 4.2%.
