Global economy to stage vigorous recovery; jobs growth to lag

The global economy will recover this year from its coronavirus slump at a pace not seen since the 1970s as strong momentum builds in most major economies, according to Reuters polls of over 500 economists. That optimism was largely led by the widely expected vaccine-driven recovery, massive liquidity injections, unprecedented fiscal support – primarily by the United States, with more in the pipeline – and continued adaptation of economic activity to overcome subdued mobility.

With many countries still facing challenges from the pandemic, when asked on the likelihood of a renewed spike in coronavirus cases derailing the global economic recovery this year, economists were split in the Reuters polls taken over the past month. But 2021 growth views for 55% of 44 economies polled on were upgraded from three months ago, led by the U.S. economy – which was predicted to mark the fastest annual expansion since 1984 – and China, set to return to pre-crisis levels this year.

The devastating pandemic pushed the world economy into its deepest-ever recession last year, but the poll showed a sharp rebound with the global economy predicted to grow on average 5.9% this year, the fastest since the 1970s. That compared to 5.3% expected in January and a sharp upgrade compared to expectations from a year ago, when the pandemic took hold. While the latest consensus is just a touch below the International Monetary Fund’s 6% projection, nearly 30% of 74 economists predicted world GDP growth in excess of the IMF’s forecast. read more

Over 85% of economists, or 152 of 178, in response to an additional question said the recovery would be faster than previously expected or about the same pace versus the remaining 26 predicting a slower pace of rebound. While the latest jobs outlook has improved slightly compared to April last year on trillions of dollars worth of stimulus, it still suggests the COVID-19 pandemic would leave many million workers jobless, with several economic sectors disrupted by mobility restrictions not expected to recover anytime soon.

Global economy to stage vigorous recovery; jobs growth to lag, Reuters, Apr 23