The United Nations (UN), an intergovernmental organization, has responded to the rebounding Chinese and US economies by revising its global economic forecast upward to 5.4 percent growth for 2021.
But the organization, headquartered in the US, warned that surging COVID-19 cases and inadequate availability of vaccines in many countries threaten a broad recovery.
In raising its projection of 4.7 percent growth in January, the UN’s mid-2021 World Economic Situation and Prospects report pointed to the rapid vaccine rollout in a few large economies led by the US and China and an increase in global trade in merchandise and manufactured goods that has already reached pre-pandemic levels.
But the UN cautioned that “this will unlikely be sufficient to lift the rest of the world’s economies,” and “the economic outlook for the countries in South Asia, sub-Saharan Africa and Latin America and the Caribbean remains fragile and uncertain.”
“The key challenge we face in the world right now is that infections are still rising in many parts of the world, and we are seeing new variants and new mutations affecting large populations in South Asia, also in Latin America. That poses a significant challenge in terms of the recovery and world economic growth. Vaccination is probably right now the number one issue to put the world economy on a steady path of recovery. however, that “vaccine inequity is a serious challenge.”
Mr. Rashid added that in normal times 5.4 percent would be considered a very high economic growth rate, but this year it is barely offsetting last year’s losses and growth is “very uneven and also very uncertain.”
He said the UN expects the US economy, which is very strong, to grow about 6.2 percent this year, “the fastest growth of the US economy since 1966,” and it expects the Chinese economy to grow by about 8.2 percent. But he called India, Brazil, South Africa and many other developing countries “weak spots.”
Mr. Rashid said that in the past the growth rate of developing countries would be higher than the global average, but this year the average growth rate of many developing countries and regions is lower because of the pandemic.
He stressed that the UN’s forecast of 5.4 percent growth this year is far more cautious than other international organizations, including the International Monetary Fund (IMF), which last month revised its 2021 projection upward to 6 percent. For 2022, the UN forecast that the global economy will grow by about 4.7 percent is higher than the IMF’s projection of 4.4 percent.