Depth and Magnitude of Global Economic rebound in 2021 remains uncertain — OPEC
The Organisation of Petroleum Exporting Countries, OPEC, has disclosed that, while a strong global economic recovery in 2021 remains very likely, the depth and magnitude of this year’s rebound remains uncertain.
In its January 2021 Oil Market report, obtained by The Daily, www.thedaily-ng.com, OPEC, stated: “While a strong global economic recovery in 2021 remains very likely, the depth and magnitude of this year’s rebound remains uncertain. New virus variants have emerged, there is still a considerable rise in infections – particularly in Western economies – and vaccination programmes in numerous large economies are off to a slow start, factors which may cloud the recovery at least for 1Q21.
“While upside potential exists, the 2021 global economic growth forecast remains unchanged at 4.4%. Further insights in the coming weeks will help create a better understanding of the global economy’s near-term path, and the forecast will be thoroughly reviewed once more in the coming month.
“In the meantime, slightly better-than-anticipated 3Q20 growth, particularly in the emerging economies, lifted the 2020 global growth estimate from a decline of 4.2% to minus 4.1%. Ongoing pandemic-related challenges are forecast to dampen the recovery, but are considered temporary, especially as a distribution of vaccines, along with other pandemic-related improvements, are forecast to gain traction. Widely available rapid-testing facilities will play an important role in addition to the vaccines.
“Therefore, the recovery is forecast to gain steam towards the end of 2Q21. Momentum is expected to be led by consumer spending, especially in the contact-intensive services sector and particularly in the areas of travel, leisure, and hospitality. The seasonal aspect of warm weather in the Northern Hemisphere and the summer travel season will add more support.
Forced household savings from lockdowns, combined with ongoing monetary and likely additional fiscal stimulus, will add to the rebound. In such an environment it is likely that rising investments will provide an additional pillar to growth. In geographic terms, the upside to the current forecast comes mainly from further US growth, an acceleration of India’s recovery, and stronger-than-anticipated growth in China amid once-again rising global trade and improving domestic activity in that country.”
According to OPEC, “Additional virus variants and the potential that vaccines could be less effective against them pose major risks to the expected recovery. The OECD growth forecast for 2020 remains at -5.3%, after slight upward revisions in the US and the Eurozone and a strong downward revision in the UK, amid ongoing weak growth and in the meantime a finalized Brexit. OECD growth in 2021 is unchanged from the previous month at 3.5%”
It added: “In the emerging economies, India’s 2020 GDP growth was revised up to -9.0% from -9.2%. For the time being, the growth forecast for 2021 is unchanged at 6.8%. China’s GDP growth forecast is unchanged at 2.0% for 2020 and 6.9% for 2021. Brazil’s 2020 GDP growth forecast was revised up to -5.2% compared to -5.8% the previous month. The Brazilian economy is forecast to grow by 2.4% in 2021, unchanged from the previous month. Russia’s 2020 GDP was revised up to stand at -4.1% after previously reaching -4.5%. The 2021 recovery is forecast to remain unchanged at 2.9%, with some potential upside to the country in connection with the ongoing DoC process.
