Global Economic Forecasts: Q4 2021

November 2021

After contracting by 3.1% in 2020, global real GDP is predicted to increase by 5.7% in 2021 and by 4.6% in 2022. The global economic outlook at the end of 2021 is mainly constrained by different mismatches: an ongoing mismatch between consumer demand and the availability of certain services, due to shifts in COVID-19 infections and restrictions, and a mismatch between the speed of recovery in demand and the rebound in global supply.

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Key Findings

Global Outlook

After contracting by 3.1% in 2020, global real GDP is predicted to increase by 5.7% in 2021 and by 4.6% in 2022. The global economic outlook at the end of 2021 remains constrained by an ongoing mismatch between consumer demand and the availability of certain services, due to shifts in COVID-19 infections and restrictions, and a mismatch between the speed of recovery in demand and the rebound in global supply.

US

US economic output has recovered to its pre-pandemic Q4 2019 level, though it remains below the pre-pandemic forecast level at the end of 2021. The real GDP growth forecast has been significantly downgraded since mid-2021 to 5.5% in 2021 and 4.3% in 2022, due partly to the emergence of another pandemic wave with the more infectious Delta variant in a population where more than 40% remain unvaccinated.

China

China’s economy has slowed down substantially since the beginning of 2021. Real GDP growth for 2021 is still projected to reach 8%, due to the earlier strong recovery from the initial COVID-19 pandemic shock in 2020; however, real GDP in Q3 was just 4.9% above its level a year earlier, with even slower growth in the industry and construction sectors. Real GDP growth is expected to slow to 5.5% in 2022 and 5.2% in 2023, with a longer term annual growth rate for the decade of 4.4%.

 

Scope
Key findings

Global Outlook: Q4 2021

Global baseline outlook: Recovery constrained by supply and demand mismatches
The pandemic continues to hamper recovery due to insufficient vaccination progress
Major supply constraints limiting the recovery are expected to loosen gradually in 2022-2023
Real GDP annual growth forecasts and revisions from last quarter – AE
Real GDP annual growth forecasts and revisions from last quarter – EMDE
Inflation forecasts
Central bank interest rates quarterly forecasts
Global risk map: China hard landing risk has increased
Global Risk Index scores and rankings
COVID-19 Optimistic1 scenario: Faster vaccination and loosening of supply constraints
COVID-19 Pessimistic1 scenario: Main downside risk
China hard landing: Main non-pandemic risk

Key Economies Outlook: Q4 2021

US: Rising COVID-19 infections and supply constraints have slowed down the recovery
US: Forecast risks
US: Growth slowed down in Q3 but consumer spending recovery remains strong
US: Consumer confidence has declined while labour market recovery remains incomplete
China: The economy has slowed down in the second half of 2021
China: Economy constrained by virus outbreaks, supply shortages and real estate problems
China: Forecast risks
China: Economic growth has slowed down while debt levels remain excessive
India: General outlook
India: Forecast risks
Japan: General outlook
Japan: Forecast risks

Key economies outlook: Q4 2021

Indonesia: Rising exports and consumer confidence support economic recovery in Q4
Eurozone: Recovery slows as fourth COVID-19 wave hits and supply constraints worsen
Eurozone: Forecast risks
UK: General outlook
UK: Forecast risks
Russia: General outlook
Russia: Forecast risks
Brazil: General outlook
Brazil: Forecast risks
Mexico: Dependence on global supply chains fuels inflationary pressures in Q4
COVID-19 global scenarios summary
Definitions
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