The global economy will expand by four percent in 2021 if governments manage to rapidly expand the distribution of vaccines throughout the year, despite logistical impediments, the World Bank said today (05.01.202021).
In the January issue, the report Economic Outlook Global, the entity considered it probable that the recovery will be moderate, unless policy makers act decisively to control the pandemic and implement reforms that increase investments.
Although the global economy is growing again after a 4,3 percent contraction in 2020, policymakers face enormous challenges in public health, debt management, budget policies, central banking and structural reforms, World Bank President David Malpass said.
“To overcome the impacts of the pandemic and counter investment headwinds, a major push is needed to improve business environments, increase labor and product market flexibility, and strengthen transparency and governance,” he added.
According to the report, the economic outlook remains uncertain and it is still possible that growth outcomes will differ.
In a pessimistic scenario in which infections continue to rise and the distribution of vaccines is delayed, global expansion could be limited to 1,6 percent.
In an optimistic context, with successful control of the pandemic and a rapid vaccination process, growth could recover to 5 percent, the text says.
Experts expect the gross domestic product (GDP) of the United States increased by 3,5 percent.
Meanwhile, they expect the aggregate GDP of emerging countries and developing economies, including China, to grow by 5 percent, after contracting by 2,6 percent in 2020.
Specialists expect that China grew by 7,9 percent, compared to the increase of 2 percentage points recorded last year.
However, it is anticipated that emerging markets and developing countries grow by 3,4 percent, after a 5 percentage point decline in the year ended.
According to the Argentina The report states that «The economy is expected to grow by 4,9% in 2021 as the easing of pandemic mitigation measures and easing uncertainty surrounding debt restructuring support private consumption and investment.
Despite a return to growth in the short term, the economic impacts of the pandemic will persist.
The World Bank noted: “As severe crises have occurred in the past, The pandemic is expected to leave lasting adverse effects on global activity. The projected slowdown in global growth over the next decade is likely to worsen due to underinvestment, underemployment and a shrinking labor force in many advanced economies.”
Therefore, "Policymakers should continue to support the recovery, gradually shifting from income support to growth-enhancing policies. Over the long term, in emerging markets and developing economies", the multinational organization said.
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