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Country Forecast World

  • ID: 2101439
  • Country Profile
  • July 2021
  • Region: Global
  • 23 Pages
  • The Economist Intelligence Unit
The Economist Intelligence Unit forecasts that global GDP will rebound by 5.3% in 2021 (up from a previous forecast of 5.2%).

This revision stems from small upward adjustments to our forecasts for France, Italy, Spain, the UK, Brazil, Mexico and South Africa.

The sharp rebound will boost global GDP back to its pre-coronavirus level in late 2021. However, the pace of recovery will vary greatly across regions.
Note: Product cover images may vary from those shown
Country Forecast World

Key trends

World growth and inflation
Asian economies fared better than others last year
Developed economies will be in recovery mode this year
Some regions will take longer than others to recover
Inflation poses a risk to the global recovery
The pace of vaccination is the main variable for economic projections
Widespread immunisation will take time
Vaccination timelines in many countries will stretch well into 2022
In developing states immunisation timelines will stretch beyond 2023

World growth and inflation: Risk scenarios
Worsening US-China ties force a full decoupling in the global economy
Unexpectedly fast monetary tightening leads to a US stockmarket crash
Tighter domestic and global financial conditions derail the recovery in emerging markets
A complete breakdown of the OPEC+ deal leads to an oil price crash
Widespread social unrest weighs on the global recovery
A conflict erupts between China and Taiwan, forcing the US to intervene
EU-China ties worsen significantly
New Covid-19 variants emerge that prove resistant to vaccines
Severe droughts prompt a famine
Inter-state cyberwar cripples state infrastructure in major economies

Regional summaries: North America
US economic growth is accelerating, creating new risks to the outlook
The Covid-19 vaccination rate continues to rise, but uptake has slowed
The path forward on an infrastructure bill remains uncertain
Congress will only pass a slimmed-down version of Mr Biden's stimulus bill
Inflation now poses the main downside risks to the economic outlook

Regional summaries: Europe
The economic rebound will be sizeable this year, but growth rates will be misleading
The biggest risk to our forecasts is a return to restrictions in late 2021
Fiscal and monetary stimulus will support the recovery
Economic resilience to the crisis diverges across eastern Europe
Relations with the US will improve, but ties with China will remain complicated

Regional summaries: Asia and Australasia
Asia is still grappling with the pandemic
Asian economies are doing better than others
Fiscal policy continues to support the economy
Ongoing US-China tensions will cast a geopolitical cloud over Asia

Regional summaries: Latin America
An ongoing surge in Covid-19 cases poses risks to the recovery
Debt overhang will constrict the medium-term outlook
Domestic and international political pressures will build
Latin America will tread a careful line between the US and China

Regional summaries: Middle East & Africa
The Middle East will continue to be a geopolitical hotspot
Fiscal pressures will ease but remain significant
The road to recovery will be tentative across Africa in 2021

Exchange rates
Monetary policy continues to weigh on the US dollar
Recent euro appreciation will persist for another quarter
The renminbi will depreciate in the second half of the year and in 2022
The recent depreciation of the Japanese yen will be short lived
The pound will appreciate over the medium term
The search for yield will benefit emerging-market currencies

World trade
The global trade picture remains fraught with risks in 2021
The global trade recovery will remain uneven across regions this year
The pandemic has prompted debates around the future of globalisation
The rollout of coronavirus vaccines will heighten protectionism risks
US-China ties are the biggest (non-coronavirus-related) threat to trade

Commodity prices
Positive economic signs from China and the US have lifted prices yet again
Crude oil prices have recovered after softening in March-April
Oil prices are forecast to remain range-bound in the second half of 2021
Oil prices are forecast to peak in 2022

Global assumptions
Note: Product cover images may vary from those shown