Strong momentum builds in most major economies might lead to a faster recovery in the global economy from its coronavirus slump, Reuters-led polls said. Accordingly, the global economy might recover at a pace not seen since the 1970s.
Several reasons led to the optimism in global economic recovery. Among them are the widely expected vaccine-driven recovery and massive liquidity injections. Unprecedented fiscal support, with the United States in the frontline and more to follow behind, further pump the confidence. Moreover, a lot of economists expect economic activity around the world to slowly adapt to the situation, overcoming subdued mobility.
Will the global economy recover faster in 2021?
Reuters‘ poll shows that analysts are still unsure either whether another spike of coronavirus cases could drag the global economy again. Especially as a lot of countries are still fighting the pandemic and the side effects.
More economists grew more confident in 2021’s growth views as the US economy predicted to mark the fastest annual expansion since 1984. Additionally, analysts believe China could set to return to pre-crisis levels this year.
HSBC’s global chief economist, Janet Henry, notes, “A synchronised global economic recovery is underway, notwithstanding the continuing battle against COVID-19. Every economy we cover is projected to register a meaningful rebound in annual average GDP growth this year”.
Henry further continued, “Much will depend on whether governments prefer a strategy of eliminating or suppressing the pandemic; access to effective vaccines; the structure of the economy; the willingness of households to spend their accumulated savings; and the scale and mix of policy stimulus.”
While pandemic dragged the world economy into the deepest-ever recession last year, forecast that follows the news say a rebound will likely come faster than ever. Reuters‘ poll shows that analysts predict an average of 5.9% growth in the global economy. This record alone is the fastest since the 1970s. In comparison, analysts had their prediction at 5.3% in January.
Meanwhile, International Monetary Fund puts its projection at 6%. In accordance with this, nearly 30% of economists bet the world GDP growth could exceed the IMF’s forecast.
Read also: India Might Be The Next Fastest Growing Economy
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