Daily Management Review

Reuters Poll Shows Forecast For Vigorous Recovery For Global Economy In 2021


Reuters Poll Shows Forecast For Vigorous Recovery For Global Economy In 2021
A poll of more than 500 economists conducted by the news agency Reuters revealed that the recovery of the global economy this year form the lows that it hit because of the novel coronavirus pandemic in 2020 will be sharpest since the 1970s.
Wide majority of the economists participating in the poll expect the global economy to growth by an average of 5.9 per cent in 2021 because of build up of strong momentum in most economies.
The world wide roll out of Covid-19 vaccines and the relate recovery of confidence of massive liquidity injections, unprecedented fiscal support – which is primarily done by the United States and there is more such support in the pipeline, as well as the continued adaptation of economic activity to overcome subdued mobility, were largely the causes of this optimism among the economists.
There was some divisions among the economists participating in the poll when they were asked about the likelihood of the derailment of the global economic recovery this year because of renewed spike in coronavirus cases as many of the important economies still facing challenges from the pandemic.
However compared to a similar poll held three months ago, the 2021 growth prospects were upgraded in this poll led by increased optimism about the United States economy which is expected to grow at its fastest rate this year since 1984 while the Chinese economy is expected to return to its pre pandemic levels of growth.
“A synchronised global economic recovery is underway, notwithstanding the continuing battle against COVID-19. Every economy we cover is projected to register a meaningful rebound in annual average GDP growth this year,” noted Janet Henry, global chief economist at HSBC.
“Much will depend on whether governments prefer a strategy of eliminating or suppressing the pandemic; access to effective vaccines; the structure of the economy; the willingness of households to spend their accumulated savings; and the scale and mix of policy stimulus.”
Last year, the global economy was pushed into its steepest ever contraction because of the pandemic which is now expected to stage a steep rebound according to the poll. A similar pool in January had shown ecop0nomists expecting a 5.3 per cent global economic expansion for 2021.
This recovery for the global economy this year would be faster than previously expected or be at about the same pace, opined more than 85 per cent of the economists, or 152 of 178 while the rest predicted a slower pace of recovery.
However the poll analysis also showed a concern among the economists about a slow growth in the recovery of the job market as they do not expect the rate of unemployment to return to pre pandemic levels in 2021 or next year in most of the advanced economies.
Even though trillions of dollars worth of stimulus has bettered the latest jobs outlook since the last one in April last year, the economists still believe that millions of workers will be jobless because of the pandemic with mobility restrictions still disrupting several sector and those are not expected to recover any time soon, the poll found.