China, which is experiencing the virus outbreak faster than the United States and other countries, will continue to benefit from a 7.8 percent growth forecast for this year. The government has poured money into infrastructure projects and extended loans and tax relief to support business and avoid pandemic-related layoffs. India’s economy is expected to grow by 12.6 percent after a decline of 7.4 percent in 2020, the organization added.
However, the duration of a global recovery will depend on the race between vaccines and emerging variants of the virus, the organization added.
If vaccination programs are not applied quickly enough to reduce infection rates, or if new variants are distributed and require changes to vaccines, consumer spending and business confidence will be hit.
The acceleration of vaccination programs will enable the world to “get ahead of the virus this year, and by the end of 2021, global activity will return to where we thought before the pandemic,” she said. Boone said.
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But if the global distribution of vaccines is volatile, confidence will be affected, and businesses and consumers will save government relief money rather than spend it.
This is especially the case for Europe and especially Germany and France, where a mix of poor public health management and slow vaccination programs is weighing a recovery, despite billions in government support.
Such spending “will not be fully effective as long as the economy does not reopen,” she said. Boone said.
The eurozone economy, made up of the 19 countries that use the currency, is expected to grow by 3.9 percent this year, slightly more than forecast in December but slower than the United States. In Britain, which took in a national vaccination late last year, the economy is expected to grow by 5.1 per cent, compared to a forecast of 4.2 per cent.