Fitch Ratings has increased its Global GDP forecast by 0.8pc points to 6.1pc in 2021 from its previous forecast due to stronger than expected results in Q4 2020 and Q1 2021, especially in Europe and emerging markets. The US released a larger than expected stimulus package while Germany, India, Japan, Italy, and the UK also announced proactive actions to boost their economies.

 

North America

US GDP growth has been revised up by 1.7pc points from 4.5pc to 6.2pc in 2021. Residential investments increased by 14.1pc in Q4 2020 compared to the same year-ago quarter. Canada’s GDP forecast is up by 1.6pc points to 6.1pc for 2021 from 4.5pc forecast for the year in December with strong residential investments, increases in home appliance buys and renovation materials in Q1 2021. Mexico’s GDP is expected to recover to 4.7pc in 2021 and 2.5pc in 2022. Like Canada, Mexico is anticipated to benefit from US buying and manufacturing activity. The US absorbs 80pc of the country’s exports. Supply chain shortages are also affecting the manufacturing output levels. The country is seeing more investments from Asia and the US. 

 

China

China’s GDP forecast is up 0.4pc points to 8.4pc. China is beginning to normalize its economic policies by scaling back its fiscal deficit and slowing down credit. The country will continue to invest substantially in large-scale infrastructure. The move is expected to support metal prices and iron prices, though the environmental policies may limit iron ore price levels on reduced demand. Supply chain bottlenecks in shipping and semiconductors are expected to ease by H2 2021. 

 

 

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