Connect with us

Hi, what are you looking for?


Economy will take two years to bounce back, warns think tank

Empty London

The economy will take another two years to recover from the pandemic, a leading think tank has warned.

The National Institute of Economic and Social Research said that GDP would expand by only 3.4 per cent in 2021, down from an earlier forecast of 5.9 per cent. It blamed “uncertainty about the path of the virus and the effectiveness of vaccines against strains.”

It struck a more cautious tone than other forecasters, including the Bank of England. Last week, the Bank pencilled in annual growth of 5 per cent and said that the economy would be back to its pre-pandemic size by early next year.

Hande Kucuk, a deputy director at the institute, said: “Despite the rollout of vaccines, Covid-19 will have long-lasting economic effects.” She added that by 2025 the economy would still be about 6 per cent lower than it would have been had Covid-19 never hit.

This would be the result of “lower consumption caused by higher unemployment, weaker business investment due to stressed balance sheets and uncertainty during the pandemic and the adoption of a trade and co-operation agreement with the EU which imposes more barriers to trade than before”.

The institute said that people would hold on to their savings because of fears about the economic outlook. Unemployment would rise as the job retention scheme ends. The jobless rate is expected to hit 7.5 per cent, or 2.5 million.

Forecast annual growth of 3.4 per cent this year is broadly in line with the United States, at 3.6 per cent, and the European Union, at 3.5 per cent. The global economy is expected to advance by 4.4 per cent, thanks to robust growth of 7.8 per cent in China.

“While we project that global GDP will regain its pre-pandemic level this year, GDP in China is already above that level. However major European economies and Japan are not expected to return to their pre-pandemic GDP levels until 2022 at the earliest,” the institute said.

Read more:
Economy will take two years to bounce back, warns think tank

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Your email address will not be published.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!



By Luisa Maria Jacinta C. Jocson, Reporter FACTORY ACTIVITY in the Philippines expanded for a tenth month in a row in November, although jobs...


Passengers wait inside the Ninoy Aquino International Airport Terminal 3 in Pasay City, Oct. 29. The growth in remittances is expected to slow next...


By Revin Mikhael D. Ochave, Reporter THE JOINT Foreign Chambers of the Philippines (JFC) is now targeting to generate $128 billion in foreign direct...


LOCAL GOVERNMENT units (LGUs) should be given more time for the smooth transition of devolved functions from the National Government (NG) agencies, according to...


IN separate advisories, the Securities and Exchange Commission (SEC) has warned the public not to invest in CashBaka, Hero Mining International Group, and


D.M. CONSUNJI, Inc.’s (DMCI) order book declined by 8.1% to P45.3 billion for the past three quarters from P49.3 billion in the same period...

You May Also Like


The minute that any question pops into your head, you can simply ask Google. No longer do we have to pour over books and...


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


Browsing history makes referring to sites and pages you’ve visited in the past seamless. It’ll help you recall what page you checked out on...


Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...

Disclaimer:, 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.