Global Economy to Reach Pre-COVID-19 Levels in 2022
The world economy is expected to reach pre-COVID-19 levels only by 2022, according to a report by The Economist Intelligence Unit (EIU), which said the global gross domestic product (GDP), would grow at 4.5 per cent next year.
“In 2021 global GDP will increase by 4.5% in real terms, the fastest growth since 1988,” the report said. However, given the 5.2% contraction expected for 2020, next year’s growth will not be enough to return the global economy to pre-coronavirus levels,” it said.
“Indeed, we do not expect a full recovery before at least 2022, meaning that 2020 and 2021 will be years of non-growth,” it added.
According to EIU, Asian countries will be the fastest to recover, with some regaining their 2019 levels as early as 2021.
However, major economies will broadly recover in 2022 and emerging markets may even have to wait until 2024 for this to happen, it said.
“This scenario rests on the assumption that the worst of the pandemic will be felt this year, and that people develop some immunity to the virus after infection,” the agency said.
EIU believes that there is no return to normalcy until a safe and effective vaccine is rolled out, which they expected to come out only during the latter part of 2021.
“As a result, local outbreaks and lockdowns are to be expected in 2021, putting most countries under severe economic, fiscal and social strain,” it said.
“The likeliest long-term scenario for advanced economies is one of low growth, low inflation and high levels of debt, as is already the case in Japan,” it said.
“Amid the pandemic-fuelled debt pile-up, the outlook for emerging markets is gloomier. Many will have no choice but to restructure debt in the medium term,” it said.