The recovery of the global economy will likely be subdued unless policymakers work to combat the pandemic and put in place investment-enhancing reforms, the World Bank has warned.
In its January 2021 Global Economic Prospects report, the bank said it expects the global economy to grow by 4% this year, assuming the roll out of COVID-19 vaccines becomes widespread. That forecast is down 0.2 percentage points vs. a projection made in June.
The bank estimates a contraction in global growth in 2020 of 4.3%.
U.S. growth was revised downward by 0.5 percentage points to 3.5% this year, with a 2020 estimated contraction of 3.6%. The eurozone growth forecast for 2021 is 3.6%, down 0.9 percentage points and compares to an estimated 7.4% contraction last year. Japan's growth forecast was unchanged at 2.5%.
Emerging market countries, however, are now expected to grow at 5% in 2021, up 0.4 percentage points vs. June projections. China, meanwhile, is expected to grow at 7.9% in 2021, revised upward by 1 percentage point vs. June projections.