1888 Press Release - Investment reform and effective immunization campaigns will help the global economy expand by 4% in 2021.
In its January 2021 Global Economic Prospects report, the World Bank predicted that the global economy would expand by 4% this year after a 4.3% contraction in 2020.
However, analysts at DC Witter Group say the effects of the pandemic are likely to be felt for many years and any recovery will hinge on proper deployment of vaccines as they become available to populations around the world.
For the global economy to continue to recover, policymakers will need to prioritize controlling the spread of Covid-19.
Vaccine offers hope for struggling economies
As 2020 drew to a close, investor sentiment was significantly boosted by the promises of an effective vaccine. However, as countries grapple with who should be the first to receive the vaccine, and the best way to deploy it, economies are suffering the effects of harsh lockdowns.
Although immunization campaigns have yet to gain traction, DC Witter Group analysts have warned that mismanagement of vaccine rollout could jeopardize economic recovery.
The World Bank report also stated that widespread investment reforms will be necessary to ensure an ongoing recovery during the course of this year, adding that it will be important that governments find ways to establish a reinvestment loop that focuses on sustainable growth.
China to see higher growth in 2021
While the global economy is expected to grow by 4% overall this year, DC Witter Group analysts say some countries will fare better than others. China has managed to maintain control of the pandemic and as a result its economy has bounced back faster and more successfully than many other countries that are still battling their 2nd and 3rd waves of infection.
China's economy is expected to grow by almost 8% in 2021, following a far more subdued 2% expansion last year. DC Witter Group analysts say the Covid-19 pandemic could see China's economy overtaking the US within the next decade. This is largely due to the swift and harsh steps taken early on by China to control its outbreak. Although criticized for its draconian measures, China managed to avoid repeating lockdowns that have devastated other economies around the world.