Global Economic Forecasts: Q4 2020

December 2020

The aggregate global real GDP growth baseline forecast has remained roughly unchanged since Q3 2020, with a projected contraction of 4.7% in 2020, followed by 5.1% growth in 2021. The end of 2020 is seeing the emergence of regional second waves especially in Europe and North America. The baseline forecast assumes these second waves are contained in Q4 2020, and widespread vaccine deployment around mid-2021.

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Global baseline outlook

The aggregate global real GDP growth baseline forecast has remained roughly unchanged since Q3 2020, with a projected contraction of 4.7% in 2020 (with a plausible range of 4.2-5.2% decline), followed by 5.1% growth in 2021 (with a plausible range of 3.5-6.5%).

However, advanced economy estimates for 2020 growth have improved on average by one percentage point, mainly due to faster economic recoveries in Q3 and a more relaxed attitude towards pandemic restrictions in the US. In contrast, the overall real GDP growth for 2020 in developing economies has been downgraded by 0.7 percentage points, despite improving outlooks for Brazil and China. This reflects the much worse than expected effects of the pandemic in India.

The end of 2020 is seeing the emergence of regional second waves especially in Europe and North America. The Eurozone and UK economies have had to resort to new lockdown measures to control fast-rising infection rates. The baseline forecast assumes these second waves are contained in Q4 2020, and widespread vaccine deployment around mid-2021.

Global baseline outlook: Partial global recovery expected in 2021
Downside risks to the baseline forecast remain substantial
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 quarterly forecasts, %
Central Bank interest rates quarterly forecasts, %
Global risks map
Global Risk Index scores and rankings
COVID-19 scenarios summary
COVID-19 Pessimistic1 scenario: Highest probability downside risk
COVID-19 Pessimistic2 scenario: Highest expected impact downside risk
General outlook (1)
General outlook (2)
Forecast risks
General outlook (1)
General outlook (2)
Forecast risks
General outlook
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General outlook
Japanese economy will feel the aftermath of the crisis for a long time
Bank of Japan introduced significant monetary policy easing
General outlook (1)
General outlook (2)
Forecast risks
General outlook
The UK economy faces significant downside risks
Unsuccessful Brexit negotiations would significantly prolong the recovery
UK public debt will be higher than the GDP at the end of 2020
General outlook
Forecast risks
General outlook
Forecast risks
Scope and Objectives
Definitions
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