New economic forecast paints rosy picture of global growth
It’s an appropriate moment to adapt Buzz Lightyear’s signature cry to the economy and to declare: “To immunity and beyond!” The statistics on vaccine distribution seem to be improving just about everywhere, and as a more generalized reopening seems imminent, companies and individuals are gearing up for a surge of activity. If that’s really what’s in the works, what will the journey look like?
First off, it’s going to be a rocket launch. In fact, ignition is already behind us, but the G-force is going to increase considerably as we move into the second half of the year. First, we have the regular recovery of sectors that are still in the abyss, brought on as more countries zero in on herd immunity. Second, there’s ongoing public stimulus—primarily the US$1.9-trillion plan currently unfolding in the United States. And third, pent-up demand will reinforce growth, aided greatly by the massive pileup of business and consumer cash in demand deposit accounts in the U.S., Europe, Canada and elsewhere.
The dynamics of this growth are evident in EDC Economics’ new Global Economic Outlook. We have revised up growth for 2021 in the U.S. economy to a whopping 7.1%. At 4.6% growth, the Eurozone isn’t as aggressive, but is still well above its long-term trend rate, and is expected to repeat this pace in 2022. Emerging economies will see explosive growth as they recover from last year’s drubbing, and as the revival in the industrialized world feeds global demand for goods and services. Collectively, emerging market growth will reach 6.5% this year and will accelerate further to 6.8% growth in 2022. As such, world growth will hit an outsized 6.2% for 2021 followed by a very impressive 5.7% next year...
This was excerpted from a 30 June 2021 commentary by Peter G. Hall of Export Development Canada.