Image

Global Economic Prospects

Subdued Global Economic Recovery

Image

Foreword

In his Foreword, World Bank Group President David Malpass examines global prospects and notes that “Making the right investments now is vital both to support the recovery when it is urgently needed and foster resilience. Our response to the pandemic crisis today will shape our common future for years to come. We should seize the opportunity to lay the foundations for a durable, equitable, and sustainable global economy.”

Global and Regional Outlooks

Image

Global

Following a collapse last year caused by COVID-19, global output is expected to expand 4 percent in 2021 but remain well below pre-pandemic projections. Downside risks include the possibility of a further resurgence of the virus, vaccination delays, more severe effects on potential output from the pandemic, and financial stress. The heightened level of uncertainty highlights the role of policy makers in raising the likelihood of better outcomes while warding off worse ones. Policy actions will need to balance the risks from large debt loads wit... See More

Global and Regional Outlooks

Image

East Asia and Pacific

After a sharp slowdown to 0.9 percent in 2020, output in East Asia and Pacific (EAP) is projected to expand 7.4 percent in 2021, to a level still around 3 percent below pre-pandemic projections. While China is expected to recover strongly, the rest of EAP is only expected to return to a level around 7.5 percent below pre-pandemic projections in 2022, with significant cross-country differences. The pandemic is expected to leave lasting economic scars on the region and dampen potential growth and incomes. Key downside risks to the outlook include... See More

Global and Regional Outlooks

Image

Europe and Central Asia

Economic activity in Europe and Central Asia (ECA) is estimated to have contracted 2.9 percent in 2020 in the wake of disruptions related to the COVID-19 pandemic. The pandemic is expected to erase at least five years of per capita income gains in about a fifth of the region’s economies and raise the poverty headcount. Economies with strong trade or financial linkages to the euro area and those heavily dependent on services and tourism have been hardest hit. Due to a resurgence of COVID-19, the pace of recovery in 2021 is projected to be slower... See More

Global and Regional Outlooks

Image

Latin America and the Caribbean

Latin America and the Caribbean (LAC) has been severely affected by the COVID-19 pandemic, from both a health and an economic perspective. Pandemic-control measures, risk aversion among households and firms, and spillovers from a shrinking global economy resulted in an estimated 6.9 percent GDP contraction in 2020, the deepest among the six emerging market and developing economy (EMDE) regions. A modest recovery to 3.7 percent growth is projected for 2021 as restrictions are relaxed, vaccine rollouts gather pace, oil and metal prices rise, and ... See More

Global and Regional Outlooks

Image

Middle East and North Africa

Output in the Middle East and North Africa (MENA) is estimated to have contracted by 5.0 percent in 2020. Significant disruptions related to COVID-19 have been compounded by the sharp fall in oil prices and oil demand. This contraction adds to already-slowing growth in the region and compounds pre-pandemic per capita income losses. Growth is expected to improve to a modest 2.1 percent in 2021, as the pandemic is brought under control and lockdown restrictions are eased, global oil demand rises, and policy support continues. The pandemic is expe... See More

Global and Regional Outlooks

Image

South Asia

The pandemic has had a devastating impact on South Asia (SAR), leading to an estimated 6.7 percent output contraction in 2020. The region is projected to grow by 3.3 percent in 2021 and 3.8 percent in 2022, substantially weaker growth than during the decade leading up to the pandemic. COVID-19 is expected to inflict long-term damage on growth prospects by depressing investment, eroding human capital, undermining productivity, and depleting policy buffers. The outlook is highly uncertain and subject to multiple downside risks, including the poss... See More

Global and Regional Outlooks

Image

Sub-Saharan Africa

Sub-Saharan Africa has been hard hit by the COVID-19 pandemic, with activity in the region shrinking by an estimated 3.7 percent last year. Growth is forecast to resume at a moderate average pace of 3 percent in 2021-22—essentially zero in per capita terms and well below previous projections—as persistent outbreaks in several countries continue to inhibit the recovery. COVID-19 is likely to weigh on growth in Sub-Saharan Africa for a long period, as the rollout of vaccines in the region is expected to lag that of advanced economies and major EM... See More

Three Topical Issues

Image

Global Economy: Heading into a Decade of Disappointments?

The COVID-19 pandemic has caused major disruptions in the global economy. Economic activity has been hit by reduced personal interaction, owing both to official restrictions and private decisions; uncertainty about the post-pandemic economic landscape and policies has discouraged investment; disruptions to education have slowed human capital accumulation; and concerns about the viability of global value chains and the course of the pandemic have weighed on international trade and tourism. As with previous economic crises, the pandemic is expect... See More

Three Topical Issues

Image

Asset Purchases in Emerging Markets: Unconventional Policies, Unconventional Times

Central banks in some emerging market and developing economies (EMDEs) have employed asset purchase programs, in many cases for the first time, in response to pandemic-induced financial market pressures. These programs, along with spillovers from accommodative monetary policies in advanced economies, appear to have helped stabilize EMDE financial markets. However, the governing framework, scale, and duration of these programs have been less transparent than in advanced economies, and the effects on inflation and output in EMDEs remain uncertain... See More

Three Topical Issues

Image

How Has the Pandemic Made the Fourth Wave of Debt More Dangerous?

The COVID-19 global recession and economic policy response have triggered a surge in debt levels in emerging market and developing economies (EMDEs). Even before the pandemic, however, a rapid buildup in these economies—dubbed the "fourth wave" of debt accumulation—had raised concerns about debt sustainability and the possibility of financial crisis. The pandemic has made the fourth wave even more dangerous by exacerbating debt-related risks. The global community needs to act rapidly and forcefully to make sure the fourth wave does not end with... See More

Connect With Us

Connect With Us

Global Economic Prospects

1818 H Street, N.W. Washington, DC 20433 USA

Questions? Send us an email at prospects@worldbank.org.

Back to Top