The Covid-19 pandemic reversed a steady decline in global current account imbalances in 2020 as massive deficit aid spending in advanced countries combined with wider trade gaps for medical supplies and plunging demand for oil and travel, the International Monetary Fund has said, Reuters reports.

The IMF's annual External Sector Report showed that the combined current account deficits and surpluses widened to 3.2 per cent of global economic output in 2020 from 2.8pc in 2019.

These gaps are set to widen further in 2021 to nearly 3.4pc of global GDP before narrowing to about 2.5pc as budget deficits in the United States and other rich nations decline and trade normalises.