Global Economy To Grow By 4 Percent In 2021
January 7, 2021 | Investopaper
World Bank estimates that the size of the global economy will grow by 4 percent in 2021. The World Bank’s projection is based on speculation that the initial vaccination campaign against Covid 19 will become widespread. Despite a 4.3 percent contraction in 2020, the global economy continues to expand. But the epidemic, which has claimed large numbers of lives and made people sick, has pushed millions into poverty. World Bank fears that this could reduce economic activity and income in the long run.
The world’s immediate top policy priority is to control COVID19 and ensure rapid and widespread vaccination operations. The World Bank has pointed out the need for authorities to facilitate a re-investment cycle aimed at sustainable growth, which is less dependent on government debt, to help the economy recover.
The collapse of global economic activity in 2020 is slightly less severe than previously predicted. The main reasons for this are the slowdown in the advanced economy and the strong recovery of the world’s second largest Chinese economy. In contrast, disruptions to economic activity in other emerging markets and developing economies have been more deadly than expected, according to the World Bank.
The World Bank report points out that while the short-term outlook remains uncertain, various growth outcomes are still possible. Given the potential, if the vaccination campaign is delayed, the transition could escalate further and the expansion of the global economy could be limited to 1.6 percent. If the epidemic is successfully controlled and vaccination campaigns are carried out at a rapid pace, global growth will reach close to five percent.
World Bank has projected the US economy to grow at 3.5 percent in 2021. The US economy was projected to shrink by 3.6 percent in 2020. The eurozone is projected to grow at 3.6 percent this year which is expected to shrink by 7.4 percent in 2020. The Japanese economy has shrunk by 5.3 percent in 2020, and is projected to grow by 2.5 percent in 2021.
The overall GDP of emerging markets and developing economies, including China, is projected to grow by 5 percent in 2021. In 2020, the region’s economy contracted by 2.6 percent. China’s economy is projected to expand by 7.9 percent in 2021. Its growth was 2 percent in the previous year. Emerging markets and developing economies other than China are expected to expand by 3.4 percent in 2021. The region’s economy contracted by 5 percent in 2020. The activity of low-income economies is projected to grow by 3.3 percent in 2021. The sector had contracted 0.9 percent in the previous year.
