UN raises global economic forecast to 5.4% growth in 2021

The United Nations responded to the rebound in the Chinese and US economies on Tuesday by revising its global economic forecast upward to 5.4% growth for 2021, but it warned that the surge in COVID-19 cases and insufficient availability of vaccines in many countries threaten a broad recovery base.

By increasing its projection from January of growth of 4.7%, the UN report on the state and outlook for the world economy in mid-2021 highlighted the rapid deployment of the vaccine in a few large economies led by the United States and China; and an increase in world trade in goods and manufactured products. commodities that have already reached their pre-pandemic level.

But the UN has warned that this is unlikely to be enough to lift the rest of the world’s economies up, and the economic prospects for countries in South Asia, sub-Saharan Africa, and Latin America and the Caribbean remain fragile and uncertain.

Lead author Hamid Rashid, head of the Global Economic Monitoring Service of the UN Department of Economic and Social Affairs, told a press conference that Europe’s prospects are not as bright as expected in due to signs of second and third waves of COVID-19 infections.

The main challenge we face in the world right now is that infections continue to increase in many parts of the world, and we are seeing new variants and mutations affecting large populations in Southeast Asia, also in America. Latin, he said.

This poses a significant challenge in terms of recovery and global economic growth. Rashid said: Immunization is probably the number one problem right now in putting the world economy on the path to a steady recovery. “ He noted, however, that “vaccine inequity is a serious challenge.” In normal times, he said, 5.4% would be considered a very high economic growth rate, but this year it barely makes up for the losses of last year and the growth is very uneven and also very uncertain.

He said the U.

N. expects the very strong US economy to grow by around 6.2% this year, the fastest growing US economy since 1966, and he expects that the Chinese economy is growing by around 8.2%.

But he called India, Brazil, South Africa and many other developing countries weak points. “ Rashid said that in the past, the growth rate of developing countries was above the global average, but this year, the average growth rate of many developing countries and regions is lower due to the pandemic.

One of the main drivers of the economic recovery has been investment, he said, with some countries like the United States only seeing a 1.7% drop in investment last year, while some developed countries have seen their investments fall by 4% of GDP, or even more.

The $ 16 trillion in stimulus measures to counter the economic impact of the coronavirus pandemic was much needed to prevent a complete collapse of the global economy, Rashid said, but it did not lead to a massive increase investments.

He warned that massive stock price surges globally create a risk to financial stability around the world, and we need to be vigilant in the face of that risk as it could also derail recovery efforts in the future.

Rashid said the UN’s forecast of 5.4 percent growth this year is much more cautious than other international organizations, including the International Monetary Fund, which last month revised its projections for 2021 to the increase to 6%.

We are still optimistic about the global economy, Rashid said, but there are a lot of uncertainties that we highlighted in our report, especially the spread of vaccination and coverage that is due to occur over the next six years. next few months to achieve this type of growth rate. that we are projecting here.

For 2022, the UN forecast that the global economy will grow by around 4.7% is higher than the IMF forecast of 4.4%.

Despite lockdown, UK GDP only shrinks 1.5% The UK economy grew 2.1% stronger than expected in March, accelerating for what is expected to be a sharp rebound this year. In the first three months of 2021, when the country was under a third lockdown, GDP declined 1.5%. Reuters EU economy set to grow: forecasts The European Union (EU) economy is expected to rebound strongly this year after the deep recession. In its latest forecast on Wednesday, the EU executive board significantly improved its forecast for economic growth. PA

Dear reader,

Business Standard has always strived to provide up-to-date information and commentary on developments that matter to you and have broader political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these difficult times resulting from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative views and cutting-edge commentary on relevant current issues.
However, we have a demand.

As we fight the economic impact of the pandemic, we need your support even more so that we can continue to provide you with more quality content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscriptions to our online content can only help us achieve the goals of providing you with even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital editor