A UN report has revised up the world economic growth as a result of robust rebounds in China and the US but warned against fragilities in other economies in the context of Covid-19.
In its mid-year update of its World Economic Situation and Prospects 2021, which was released in January 2021, the UN Department of Economic and Social Affairs (DESA) now predicts the world economy will grow 5.4 per cent in 2021 instead of the 4.7 per cent forecast in January 2021, Xinhua reported.
Following a sharp contraction of 3.6 per cent in 2020, the world economy will return to positive territory as the world’s two largest economies — China and the US — will register impressive growth, according to the mid-year update, which was released on Tuesday.
DESA revised its forecast for China from 7.2 per cent to 8.2 per cent; and for the US from 3.4 per cent to 6.2 per cent for 2021.
While the global growth outlook has improved, surging Covid-19 infections and inadequate vaccination progress in many countries threaten a broad-based recovery of the world economy, warned the report.
The pandemic is far from over for a majority of countries. Daily new infections were higher in April 2021 than the number of new infections reported daily during the peak of the pandemic in December 2020, the report noted.
With the risks of a prolonged pandemic and insufficient fiscal space to stimulate demand, the world’s most vulnerable countries are facing the prospect of a lost decade.
The growth outlook in several countries in South Asia, sub-Saharan Africa, and Latin America and the Caribbean, remains fragile and uncertain. For many developing countries, economic output is only projected to return to pre-pandemic levels in 2022 or 2023, according to the report.