This year’s recovery of the global economy from the most severe recession after World War II is expected to be slightly slower than previously expected due to the re-expansion of the new coronavirus infection in developed countries. The forecast was made in the semi-annual World Economic Outlook (GEP) released by the World Bank on the 5th.
The growth rate of the world economy in 2021 is expected to be 4%, which is lower than the forecast as of June last year (4.2%), and is expected to grow by 3.8% in 2010. The World Bank has lowered its growth forecasts for the US and the euro area, raising China’s growth rate by 1 point to 7.9%.
The World Bank, which expects a 20-year growth rate of minus 4.3%, points out that the short-term outlook for economic recovery is accompanied by “extraordinary uncertainty.” Unless governments improve the business environment, education and productivity, the pandemic of the new corona could push the growth rate of the global economy down over the next decade.
In the preface to the GEP, World Bank Governor Malpas said, “Policies who are trying to give momentum to the current fragile economic recovery and ensure strong growth are those who are in public health, debt management, budget policy and structure. We are facing serious challenges in the field of reform. “
Global Bounceback
The economy is predicted to rebound from its worst slump since World War II.
Source: World Bank
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According to the World Bank, millions of people have fallen into poverty due to the Corona disaster, and about a quarter of emerging and developing countries have lost at least 10 years of income growth, but the positive effects of vaccination. It is expected that confidence, consumption and trade will be boosted this year and next year.
However, he said that there are still many risks in the outlook, and he mentioned the spread of new infections, delays in vaccination, financial tightness in the face of large debts, unemployment and prolonged suspension of business activities. It was. He also warned that a prolonged economic downturn could trigger a bankruptcy and ignite the financial crisis.
Bouncing Back
Emerging markets will continue to outpace advanced economies
Source: World Bank
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The World Bank also analyzed that the gross domestic product (GDP) ratio of government borrowing by emerging and developing countries in 20 years is likely to have risen by 9 points, the largest since the debt crisis in the late 1980s. He argued that society needs to help reduce debt burdens.
He also predicted that this year’s growth rate for emerging and developing countries will be 5%, while the improvement mainly reflects the recovery of China, where the new corona is almost suppressed. With the exception of China, pandemics will continue to weigh on consumption and investment, with emerging and developing economies expected to grow at 3.4% this year and 3.6% next year.
2021 GDP Forecast
The World Bank predicts the global economy will grow 4% this year
Source: World Bank
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Other main points of GEP are as follows.
- The US growth forecast for 2009 has been revised downward from 4% to 3.5%.New restrictions and widespread re-infection are expected to curb demand at the beginning of the year
- Due to a severe lockdown (blockade of the city), the growth rate forecast for the euro area has been lowered from 4.5% to 3.6%.The tourism industry is likely to continue to decline
- Raised growth forecast for Latin America from 2.8% to 3.7%.The background is the relaxation of restrictions, the acceleration of vaccination in the latter half of the year, and the prospect of rising crude oil and metal prices.
Original title:Global Economic Outlook Dims on Virus’s Surge Ahead of Vaccines (Excerpt)
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