Hopes of early availability of COVID-19 vaccine and governments fiscal stimuli are expected to push Global GDP up by 4.2pc in 2021, after recovering from a 4.2pc fall in 2020, according to the Organisation for Economic Co-operation and Development (OECD) Outlook.
Global GDP in Q4 2020 is expected to drop by 3pc from the prior-year quarter with Euro area and the US dipping by 7.3pc and 3.2pc, respectively. Europe and North America are now facing a resurgence of the COVID-19 cases. Persistent outbreaks, followed by restriction measures will continue to hamper economic activity until a vaccine is widely available, stated the OECD report.
Economic bounce-back will be strongest in the Asian countries that have been able to control the virus but even at the end of 2021, many GDPs will have contracted from 2019 levels.
China’s GDP is forecast to grow by 8pc in 2021, after from the prior year and the only G20 nation which will record growth this year, as reported by Davis Index. A resurgence in the pandemic has slowed the initial recover momentum and weakened business and consumer confidence, globally.
Business activities will be constrained amid social distancing and strict scrutiny at borders which are expected to continue through the first half of 2021. OECD Outlook says the recovery would be stronger, if vaccines hit the market faster, while warns that delays to vaccination and difficulties in controlling the latest outbreaks could weaken the outlook. In the latter scenario, global growth could lower by 2.75 percentage points in 2021.