Global Economy To Grow 5.6% In 2021 – World Bank

According to the World Bank’s June 2021 report, the global economy is projected to grow at a rate of 5.6 percent in 2021, 1.6 percentage points higher than their initial outlook of 4.0 percent.

According to the globallender, the growth will largely be driven by a projected 6.0 percent growth in emerging markets and developing economies, coupled with a 5.4 percent growth in advanced economies.

The 5.6 percent projected growth by the World Bank is the strongest post-recession pace in 80 years.

The global recovery is however uneven, with advanced economies rebounding while developing countries lag behind driven by the unequitable vaccine access and distribution.

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The economic growth shall be largely supported by how fast the vaccines shall be distributed and the strength of the Fiscal and monetary measures put in place.

The key challenges going forward shall be the increasing inflation rates globally due to high commodity prices and the high cost of trade due to shipping and logistical strains globally.

“By 2022, global output will remain about 2 percent below prepandemic projections, and per capita income losses incurred last year will not be fully unwound in about two-thirds of EMDEs,” said World Bank in their June report.

The global outlook remains subject to significant downside risks, which include the possibility of large COVID-19 waves in the context of new virus variants and financial stress amid high EMDE debt levels.

Following a 3.5 percent contraction caused by the COVID-19 pandemic in 2020, global economic activity has gained significant momentum; however, it remains well below pre-pandemic projections.

Moreover, the recovery is uneven, passing over many poorer countries, and there is considerable uncertainty about its durability.

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In advanced economies, the rebound is expected to accelerate in the second half of 2021 as a broader set of economies pursue widespread vaccination and gradually reopen, with growth forecast to reach 5.4 percent this yea —its fastest pace in nearly five decades.