• The global economy is set to expand 5.6% in 2021.
  • The strength of the near-term global recovery is largely attributable to a few major economies, such as the United States and China.
  • Rapid vaccination progress has contributed to forecast upgrades in many countries.
  • Global output is expected to remain about 2% below pre-pandemic projections by 2022.

The global economy is set to expand 5.6 percent in 2021—its strongest post-recession pace in 80 years. This recovery is uneven and largely reflects sharp rebounds in some major economies amid highly unequal vaccine access, with many poorer countries facing subdued prospects. By 2022, last year’s per capita income losses are not anticipated to be reversed in about two-thirds of emerging market and developing economies (EMDEs). To help repair the damage from the pandemic, policy makers will need to promote growth-enhancing reforms and steer their economies onto a green, resilient, and inclusive development path.

1. Global growth is projected to recover in 2021, fueled by robust rebounds in some major economies

The strength of the near-term global recovery is largely attributable to a few major economies, such as the United States and China, with many emerging market and developing economies (EMDEs) lagging behind. The United States and China are each expected to contribute over one-quarter of global growth in 2021, with the U.S. contribution nearly triple its 2015-19 average.

contributions to global growth
The United States and China are each expected to contribute over one-quarter of global growth in 2021.
Image: The World Bank

2. Vaccination progress is a key factor behind near-term forecast revisions

Global growth in 2021 is projected to be more robust than previously envisioned. Rapid vaccination progress has contributed to forecast upgrades in many countries; however, this is concentrated primarily in advanced economies. For many EMDEs, renewed COVID-19 surges and limited vaccination have contributed to downward revisions to growth.

forecast revisions to global growth 2021
Global growth in 2021 is projected to be more robust than previously envisioned.
Image: World Bank

3. Global output is rebounding but will remain below pre-pandemic projections by 2022, with more subdued recoveries in poorer countries

By 2022, global output is expected to remain about 2 percent below pre-pandemic projections. The strength of the recovery is uneven, and many EMDEs face elevated COVID-19 caseloads and obstacles to vaccination.

a chart showing deisation of output from prepandemic projections
By 2022, global output is expected to remain about 2 percent below pre-pandemic projections.
Image: World Bank
coronavirus, health, COVID19, pandemic

What is the World Economic Forum doing to manage emerging risks from COVID-19?

The first global pandemic in more than 100 years, COVID-19 has spread throughout the world at an unprecedented speed. At the time of writing, 4.5 million cases have been confirmed and more than 300,000 people have died due to the virus.

As countries seek to recover, some of the more long-term economic, business, environmental, societal and technological challenges and opportunities are just beginning to become visible.

To help all stakeholders – communities, governments, businesses and individuals understand the emerging risks and follow-on effects generated by the impact of the coronavirus pandemic, the World Economic Forum, in collaboration with Marsh and McLennan and Zurich Insurance Group, has launched its COVID-19 Risks Outlook: A Preliminary Mapping and its Implications - a companion for decision-makers, building on the Forum’s annual Global Risks Report.

The report reveals that the economic impact of COVID-19 is dominating companies’ risks perceptions.

Companies are invited to join the Forum’s work to help manage the identified emerging risks of COVID-19 across industries to shape a better future. Read the full COVID-19 Risks Outlook: A Preliminary Mapping and its Implications report here, and our impact story with further information.

4. The pandemic has slowed or reversed the pace of convergence between advanced economies and EMDEs

Per capita income growth in many EMDEs will lag the pace of recovery in advanced economies. As a result, the pace of per capita income catch-up with advanced economies has slowed or even reversed, particularly in the poorer and more fragile countries.

epr capita income growth relative to advance economies
Per capita income growth in many EMDEs will lag the pace of recovery in advanced economies.
Image: World Bank

5. Reforms that bolster a green, resilient, and inclusive recovery will be needed to address the dual challenges posed by the pandemic’s lasting scars and the ongoing impact of climate change

A comprehensive set of policies will be required to promote a strong recovery that mitigates inequality and enhances environmental sustainability, ultimately putting economies on a path of green, resilient, and inclusive development. Investments in green infrastructure, climate-smart agricultural technologies, and climate resilience—combined with sustainable energy policies—can play a pivotal role in increasing the use of renewable energy sources and lowering greenhouse gas emissions.

green house gas emissions
A comprehensive set of policies will be required to promote a strong recovery that mitigates inequality and enhances environmental sustainability.
Image: World Bank