Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Assuming the COVID-19 vaccine becomes prevalent worldwide this year, the World Bank has estimated that the global economy will expand by 4pc in 2021. In 2020, the global economy contracted 4.3pc, stated the World Bank.


The recovery in 2021 will be subdued if policymakers fail to play a pivotal role in curbing the pandemic. They will have to make sound investment-enhancing reforms, says the World Bank in its January 2021 Global Economic Prospects.


The pandemic has left behind death, illness, poverty. Several economies are struggling to recoup as activities and incomes remained hit for a prolonged period, noted World Bank. The collapse in economic activities in 2020 is slightly less than previous estimations. Lower than expected contractions in advanced economies, and a strong recovery in China could have cushioned the fall in global activities. On the other hand, emerging economies and developing markets’ disruptions were more acute than anticipated by the World Bank.


The global economy, however, seems to have entered a subdued recovery phase, states Davis Malpass, World Bank Group President. He further suggests that to overcome the impact of the pandemic and to counter the investment headwind, a major push to improve business environments, increase labor and product market flexibility, and strengthen transparency and governance is the need of the hour.


World Bank has estimated near-term growth to be highly uncertain. A possibility of different growth outcomes cannot be ruled out says the report. If COVID-19 cases keep increasing,  the economic expansion across the world could be limited to 1.6pc in 2021. While in an optimistic scenario, a successful pandemic control would result in a growth of nearly 5pc.


In advanced economies, the rebound stalled in the September quarter following a resurgence of infections, pointing to a slow and challenging recovery. The US GDP is forecast to expand by 3.5pc in 2021. In Europe, the output is likely to grow by 3.6pc in 2021. Activity in Japan, which shrank by 5.3pc in 2020, is forecast to grow by 2.5pc in 2021.


Aggregate GDP in emerging market and developing economies, including China, is expected to grow 5pc in 2021, after a contraction of 2.6pc in the previous year. China’s economy could expand by 7.9pc this year following 2pc growth in the year prior. Excluding China, the emerging market and developing economies are forecast to expand by 3.4pc in 2021 after a contraction of 5pc in 2020.


Without effective measures, the slowdown could worsen leading to underinvestment, unemployment, and a decline in the labor force in economies. The year 2020 has proved that unless comprehensive reforms to improve the fundamental drivers of sustainable growth are chalked out, the global economy is heading for a decade of growth disappointments. 

Leave a Reply

Your email address will not be published.