Global Economic Forecasts: Q1 2021

March 2021

The global recession of 2020 was milder than expected with global real GDP in 2020 contracting by 3.6%. The global economic outlook has substantially improved since the end of 2020. Global real GDP growth in 2021 is expected to be 5.3%. The global recovery is expected to continue in 2022 with real GDP growth of around 4%.

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Globalbaseline outlook

restrictions in Q4 2020. Many economies especially in Europe are still subject to significant social distancing and economic activity restrictions in Q1 2021, however the global economic outlook has nevertheless substantially improved since the end of 2020.   The global recession of 2020 was milder than expected with global real GDP in 2020 contracting by 3.6% (1.1 percentage points better than expected in the Q4 2020 forecasts report). This mainly reflects a faster than expected recovery in advanced economies in Q3 from the initial COVID-19 wave lockdowns, followed by a more moderate than expected economic impact of pandemic

Global real GDP growth in 2021 is expected to be 5.3% (with a plausible baseline forecast range of 4.3-6.3%). The global recovery is expected to continue in 2022 with real GDP growth of around 4%. Under the baseline forecast, the global economic recovery in 2021-2022 will still leave global real GDP around 3.7% below the pre-pandemic forecast level.

The overall outlook is more optimistic in Q1 2021, with significantly lower downside risks. The baseline forecast and a more optimistic scenario with 2021 real GDP growth of 6.3-7.8% are now assigned around 60% probability compared to around 51% probability in the Q4 scenarios outlook, with corresponding decline in pessimistic scenario probabilities. The baseline forecast is assigned a 45-55% probability.

Global Outlook

Global baseline outlook: Downside risks to the recovery have declined
Uncertainty remains high, but with a more optimistic tilt
Real GDP annual growth forecasts and revisions from last quarter, AE (%, percentage points)
Real GDP annual growth forecasts and revisions from last quarter, EMDE (%, percentage points)
Inflation forecasts, %
Central Bank interest rates quarterly forecasts, %
Global risks map
Global Risk Index scores and rankings
COVID-19 scenarios summary
COVID-19 Pessimistic1 scenario: Main downside risk
COVID-19 Pessimistic2 scenario: Worst case downside risk
COVID-19 Optimistic1 scenario: Faster economic recovery

US

General outlook (1)
General outlook (2)
Forecast risks
Private sector confidence and employment

China

General outlook
Forecast risks
Consumer confidence and spending returning

India

General outlook
Forecast risks

Japan

General outlook
Forecast risks
Soaring public-debt-to-GDP ratio poses risks to fiscal sustainability in Japan

Eurozone

General outlook
Forecast risks
Economic sentiment and business climate

UK

General outlook
New COVID-19 variants may reduce business hopes of a swift recovery
Record budget deficit in 2020 may require tax hike to cover financial hole

Russia

General outlook
Forecast risks

Brazil

General outlook
Forecast risks

Notes

Scope and Objectives
Definitions
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