Global Statistics

All countries
240,188,856
Confirmed
Updated on 14/10/2021 6:43 pm
All countries
215,765,598
Recovered
Updated on 14/10/2021 6:43 pm
All countries
4,893,161
Deaths
Updated on 14/10/2021 6:43 pm

Global Statistics

All countries
240,188,856
Confirmed
Updated on 14/10/2021 6:43 pm
All countries
215,765,598
Recovered
Updated on 14/10/2021 6:43 pm
All countries
4,893,161
Deaths
Updated on 14/10/2021 6:43 pm

Global growth will remain strong, but coronavirus is the main risk, economists say

The outlook for global economic growth remains strong for this year and next, despite a significant majority of economists in Reuters polls warning that new variants of the coronavirus pose the greatest risk to that outlook.

A global survey of nearly 500 economists conducted this month also concluded that the recent surge in inflation in key economies around the world would be transitory.

The world economy was now forecast to expand 6.0% this year, which would be the fastest in nearly half a century, followed by a still robust 4.5% in 2022. Both were marginal increases from the April survey.

Just over half of the 48 economies surveyed in each quarter were updated in both years.

But a spike in the latest variant of the virus, which has kept the delayed Tokyo 2020 Olympics a no-spectator event, is a reminder that vaccines may have gotten better, but the pandemic has not gone away.

“In recent weeks, the financial markets have caught up with the idea that the COVID crisis is not completely over. The Delta variant adds to the challenge, raising the number of cases and the threshold for herd immunity.” said Ethan Harris, Global Securities Economist at Bank of America.

“In general, we see the Delta rise as a moderate headwind for global growth, but as new information comes in, we can persuade ourselves otherwise.”

Chart: Reuters survey graph on world economic growth and inflation rate outlook: https://fingfx.thomsonreuters.com/gfx/polling/xmvjogrkrpr/Global%20growth%20graphic%20(1).PNG

Financial markets are on edge ahead of the US Federal Reserve meeting this week, where lawmakers are grappling with rising coronavirus infections and a disrupted global supply chain that could induce further price pressures.

As for the risks to the global economy, nearly 80% of economists, or 160 out of 202 who responded to an additional question, said the biggest was the spread of new variants of the coronavirus.

More than 70% of economists, or 152 out of 209, said the current upward trend in global inflation was transitory.

But respondents updated their 2021 inflation forecasts for 35 of the 48 economies surveyed and 31 of them for next year. At the same time, there were 29 economies with growth improvements for this year and 26 for the next, suggesting some price stickiness.

“What makes market prices in the US more instructive is that they clearly qualify the will of (the Fed’s) policy to consider higher inflation credible. This is at a time when inflation of US of surprises to the upside in DMs and some EMs, “said Christian Keller, head of economic research at Barclays.

Chart: Chart from Reuters Global Economic Outlook Survey: https://fingfx.thomsonreuters.com/gfx/polling/jnvwegxyzvw/Global%20growth%20graphic.PNG

While economists had expected the Fed to end its bond buying program by the end of 2022, and some more analysts are now forecasting a rate hike next year, the Bank of Japan and the Bank of England were predicted to maintain the trend. policy unchanged until the end of next year. [ECILT/US][ECILT/GB][ECILT/JP]

Meanwhile, the European Central Bank will start reducing its purchases of pandemic-related assets sometime after its September meeting and will stop buying them at the end of March. [ECILT/EU]

While developed economies have managed the pandemic with massive vaccination campaigns, emerging economies still face dose shortages.

“The vaccine remains the key,” said Morgan Stanley strategist Vishwanath Tirupattur. “Risks remain high in countries with low vaccine penetration, especially in South and Southeast Asia, Africa and other emerging market economies.”

In China, the world’s second-largest economy, economic growth likely slowed sharply to 8.1% in the second quarter from a record 18.3% in January-March, as new outbreaks of COVID-19 have affected spending on the consumers.

Economists had expected Australia’s resource-rich economy to be hit this quarter by renewed lockdown restrictions and India’s economic recovery was also forecast to lose momentum. [ECILT/AU][ECILT/IN]

Brazil’s economy was forecast to prolong its “jobless recovery” after rising inflation this year, while growth prospects in Mexico looked more encouraging. [ECILT/LTAM]

How labor markets recover or adapt effectively once government support schemes expire will also be key to the outlook for growth and inflation in the coming months.

Overall, unemployment rates were expected to remain above pre-COVID-19 levels for years to come, including in the United States, where the pace of hiring has been very strong in recent months.

According to Michael Every, global strategist at Rabobank, “a weak and atomized global labor market acts as a huge structural obstacle to sustained wage inflation and thus to sustained inflation in general.”

(For other stories from Reuters’ long-term global economic outlook survey package 🙂

(Report by Shrutee Sarkar; Analysis by Indradip Ghosh; Surveys and additional reports from Reuters Polls team in Bengaluru and offices in Shanghai, Tokyo, London, Istanbul, Johannesburg and Buenos Aires; Editing by Ross Finley and Steve Orlofsky)

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