Connect with us

Hi, what are you looking for?

Economy

World Bank sees global output up 4% in 2021, flags downside risks

WASHINGTON — The global economy is expected to expand 4% in 2021 after shrinking 4.3% in 2020, the World Bank said on Tuesday, although it warned that rising COVID-19 infections and delays in vaccine distribution could limit the recovery to just 1.6% this year.

The World Bank’s semi-annual forecast showed the collapse in activity due to the coronavirus pandemic was slightly less severe than previously forecast, but the recovery was also more subdued and still subject to considerable downside risk.

“The near-term outlook remains highly uncertain,” the Bank said in a statement. “A downside scenario in which infections continue to rise and the rollout of a vaccine is delayed could limit the global expansion to 1.6% in 2021.”

With successful pandemic control and a faster vaccination process, global growth could accelerate to nearly 5%, it said in its latest Global Economic Prospects report.

More than 85 million people have been infected by the novel coronavirus and nearly 1.85 million have died since the first cases were identified in China in December 2019.

The pandemic is expected to have long-lasting adverse effects on the global economy, worsening a slowdown that was already projected before the outbreak began, and the world could face a “decade of growth disappointments” unless comprehensive reforms were put in place, the Bank said.

Shallower contractions in advanced economies and a more robust recovery in China helped avert a bigger collapse in overall global output, but disruptions were more acute in most other emerging market and developing economies, the Bank said.

Aggregate gross domestic product in emerging markets and developing economies—including China—is expected to grow 5% in 2021 after a contraction of 2.6% in 2020.

China’s economy was expected to expand by 7.9% this year after growing by 2% in 2020, the Bank said.

Excluding China, emerging market and developing economies were seen expanding 3.4% in 2021 after shrinking 5% in 2020.

Per capita incomes have dropped in 90% of emerging market and developing economies, tipping millions back into poverty, with reduced investor confidence, increasing unemployment and loss of education time seen dampening prospects for future poverty reduction, the Bank said.

The crisis also triggered a surge in debt levels among emerging market and developing economies, with government debt up by 9 percentage points of GDP—the largest one-year spike since the late 1980s.

“The global community needs to act rapidly and forcefully to make sure the latest wave of debt does not end with debt crises,” the report said, adding that reductions in debt levels would be the only way for some countries to return to solvency.

A resurgence of infections stalled a nascent rebound in advanced economies in the third quarter, with economic output now expected to expand by 3.3% in 2021, instead of 3.9% as initially forecast, the Bank said.

It forecast that US gross domestic product would expand by 3.5% in 2021, after an estimated 3.6% contraction in 2020. The euro area was expected to see output grow 3.6% this year, following a 7.4% decline in 2020, while activity in Japan, which shrank by 5.3% in the year just ended, is forecast to grow by 2.5%. — Andrea Shalal/Reuters

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Investing

There is growing concern that free, face-to-face advice which helps hundreds of thousands out of debt each year could be cut. New contracts from...

Investing

The Bank of England’s new chief economist has warned that UK inflation is likely to hit or surpass 5% by early next year. Huw...

Economy

By Luz Wendy T. Noble, Reporter  The Philippines expects to narrow its budget deficit, with the government having raised tax collections as of end-September amid a coronavirus...

Economy

The Philippine economy is expected to grow by 4.3% this year — slower than originally expected — due to recurring coronavirus infection surges in the region, according to the ASEAN+3 Macroeconomic...

Economy

By Luz Wendy T. Noble, Reporter The Philippine central bank sold P100 billion worth of 28-day bills on Friday, with rates slipping as it...

Economy

The Department of Health reported 5,823 coronavirus cases on Friday, bringing the total to 2.7 million.  The death toll rose to 41,520 after 283 more patients...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Economy

Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...

Investing

As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Economy

Pfizer Inc on Wednesday raised its 2021 sales forecast for its COVID-19 vaccine by 29% to $33.5 billion, and said it believes people will...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.



Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!