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Advanced economies should recover much faster - report

Analysis

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According to the Global Economic Forecasts report by Euromonitor International Analytics, the global real GDP growth in 2021 is expected to be 5.3% (with a plausible baseline forecast range of 4.3–6.3%), the Warsaw Business Journal reports.

The global recovery is expected to continue in 2022 with real GDP growth of around 4%. Under the baseline forecast, the global economic recovery in 2021–2022 will still leave global real GDP around 3.7% below the pre-pandemic forecast level. 

"The overall outlook is more optimistic in the first quarter of 2021, with significantly lower downside risks. The baseline forecast and a more optimistic scenario with 2021 real GDP growth of 6.3–7.8% are now assigned around 60% probability compared to around 51% probability in the outlook of the fourth quarter scenario, with a corresponding decline in pessimistic scenario probabilities. The baseline forecast is assigned a 45–55%," the report reads.

Euromonitor analysts claim that the major vaccination campaigns are in progress, and vaccination rates sufficient for herd immunity are likely to be attained in advanced economies in q3–q4 2021, allowing most social distancing restrictions to end by the end of 2021 and leading to a strong economic rebound in the second half of 2021. Vaccination campaigns in developing economies are expected to take longer, continuing into 2022–2023. As a result, these economies are likely to face ongoing local covid-19 waves and slower recoveries in 2021–2022 relative to their pre-pandemic forecasts, with the exception of the fast recovery in China.

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