After a year of economic crisis due to the Novel Coronavirus or COVID-19 pandemic, the World Bank expects 4% expansion of the global economy in 2021.
The COVID-19 vaccine started rolling out in many nations, which would be a major factor in the global economic expansion.
However, the global economic growth could be limited to 1.6% in 202,1 if a downside scenario is witnessed in which COVID-19 infections continue to surge and vaccine rollouts are delayed.
The World Bank President David Malpass, on the 5th of January said, “The global economy appears to be emerging from one of its deepest recessions and beginning a subdued recovery.”
Mr. Malpass said, “While the global economy appears to have entered a subdued recovery, policymakers face formidable challenges—in public health, debt management, budget policies, central banking and structural reforms—as they try to ensure that this still fragile global recovery gains traction and sets a foundation for robust growth.”
The World Bank said, in order to better the economic situation, policymakers need to be strategic and enhance the situation by re investment cycle, better schemes for business setting foundation for growth and development.
However, In its baseline forecast on the 5th of January, the World Bank projects the global economy to grow by 4% in 2021 after a 4.3% contraction in 2020.
If the vaccine rollout becomes widespread throughout the year, while policymakers contain the pandemic and implement reforms that boost investments– the global growth rate is expected to moderate to 3.8% in 2022.
Aggregate GDP in emerging market and developing economies, including China, is expected to grow to 5% in 2021, after a contraction of 2.6% in 2020.
Excluding China, emerging markets and developing economies are forecast to expand to 3.4% in 2021 after a contraction of 5% in 2020. Among the low-income economies, activity is projected to increase to 3.3% in 2021, after a contraction of 0.9% in 2020.
In India, theGross Domestic Product (GDP) is expected to be 5.4 % in 2021.
By region, real GDP growth in 2021 is projected to hit 7.4% in East Asia and Pacific, 3.3% in Europe and Central Asia, 3.7% in Latin America and the Caribbean and 2.1% in the Middle East and North Africa. South Asia and Sub Saharan Africa are forecast to log economic expansion of 3.3% and 2.7%, respectively.
Stay tuned for further updates.