World Economic Outlook forecasts recovery
The latest “World Economic Outlook” published on Tuesday 26th of January by the International Monetary Fund is predicting that the global economy is expected to grow by 5.5% in 2021 This represents an increase of 0.3 percentage points when compared to the previous forecast in October. The current forecast is predicting more positive growth in 2022 with a further 4.2% expansion of the global economy. The worlds advanced economies are expected to show strong regrowth with projections of 4.3% in 2021 and over 3% in 2022 an improvement on the IMF forecast from October.
Leading the forecasted growth rates are the worlds emerging markets which are forecasted to have an expected growth of 6.3% in 2021 and 5% in 2022, which marks a marginal increase from the IMF’s October forecast of 6%.
The ASEAN-5 economies - comprising Indonesia, Malaysia, the Philippines, Thailand, and Vietnam - are projected by the IMF to experience growth of 5.2% in 2021 and bounding on their success in 2022 with an estimated growth rate of 6% which was upwardly revised from the October prediction.
Thailand has shown an improvement in its IMF forecast which has reduced the contraction of 2020 by 0.5%, which will be helped by a return to positive growth in 2021 of 2.7% and of 4.6% in 2022. With the tourism sector representing a 17.7% share of the Thai economy, the rapid rollout of the global vaccination program presents an opportunity for the Thai economy to accelerate their recovery towards the end of 2021 and in 2022.
China has shown strong performance in the last quarter and returned to its pre-pandemic levels taking its position as the lead economy in the world. China was the sole large economy to experience growth in 2020, thanks in part to strong economic relief measures and quarantine policies implemented to tackle the pandemic. Looking forward to 2021 China’s economy is forecasted to rebound with growth rates projected by the IMF of 8.1 % and further into 2022 a growth rate of 5.6%.
Eurozone economies are recovering faster than expected with the eurozone contraction rate being reduced by 1.1% for 2020, and a projected growth rate of 4.2% in 2021 and an estimated growth rate of 3.6% in 2022. In particular, Italy has performed better than expected in the October forecast with the contract rate being reduced by 1.4% from 10.6% to 9.2%. Looking forward to 2021 and 2022 Italy is forecasted to have growth of 3% and 3.6% respectively, a stronger showing in 2022 when compared to October’s forecast.
The United States’ recovery is now forecasting to be stronger than expected, with the IMF upgrading their October prediction by 2% up to 5.1% growth rate for 2021 with a further growth of 2.5% in 2022.