The United Nations Conference on Trade and Development (UNCTAD) forecasts world economic growth of 4.7%, mainly due to the recovery in the United States, up from the 4.1% expected in September, it was reported today.
According to the Geneva-based UN agency, “the world economy is expected to grow 4.7% this year, faster than expected in September (4.3%) thanks in part to a stronger recovery in the United States.”
According to UNCTAD, the US recovery is due to “progress in vaccine distribution and a new $1.9 trillion fiscal stimulus” that should “accelerate consumer spending.”
However, the world economy is still expected to be $10 trillion short of the level it was at before the covid-19 pandemic, according to UNCTAD.
Thus, for the United States, the UN agency points to a 4.5% growth of the Gross Domestic Product (GDP) in 2021, and also expects a 2.1% increase in the Japanese economy and 8.1% in China.
As for Europe, the Euro Zone should grow 4.0%, France 5.3%, Germany 3.3% and Italy 4.1%, while the United Kingdom should see its GDP grow 4.4%.
According to today’s report, the most optimistic outlook relative to September is based on “improved vaccination and containment of the [covid-19] disease in advanced and middle-income economies,” a “rapid transition from easing policies to recovery policies in the world’s largest economies,” and still “no significant financial ‘crash.
However, the agency stresses that although support measures have been more pragmatic in this crisis than in previous ones, “we already see resistance to expansionary fiscal policy in some countries, based on talk of possible strengthening inflation and concerns about sovereign debts.”
“A misguided return to austerity after a deep and destructive recession is the main risk to our global outlook, especially in the context of fractured labor markets and deregulated financial markets,” the paper can read.
