By Tom Burnett CFA
On June 8, 2021, the World Bank released its updated global GDP growth forecast models from the January 2021 Report. The WB now expects world growth of 5.6% in 2021, an increase of 1.5% from the January Report. If achieved, this rate of global growth would be the fastest annual rate in more than 80 years. The global expansion is expected to continue in 2022, with growth of 4.3% expected. In 2020, the Covid-19 outbreak and the measures imposed to counter it led to a decline in world GDP of 3.5%. Importantly, world trade declined by 8.3% in 2020, but is expected to grow by 8.3% in 2021 and by another 5.3% in 2022.
For the U.S. economy, the decline in 2020 was 3.5%, but strong growth of 6.8% is forecast for 2021. The outlook for 2022 is also positive with a GDP growth rate of 4.2% projected.
The Euro area was hit hard in 2020 with a decline of 6.6%, but rebounds of 4.2% and 4.4% are expected in 2021 and 2022 respectively.
China has been the star performer. It was able to grow GDP in 2020 by 2.3% and the WB projection for 2021 is growth of 8.5%. Further growth of 5.4% is now expected for 2022.
The latest Report now shows advanced growth for all the major economies at rates that exceed the rates projected in the January Report.
Tom Burnett CFA is Director of Research