world right now is that infections are still rising in many parts of the world, and we are seeing The United Nations on Tuesday responded to the rebounding Chinese and US economies by revising its global economic forecast upward to 5.4 percent growth for 2021, but it warned that surging COVID-19 cases and inadequate availability of vaccines in many countries threaten a broad-based recovery.
In raising its projection from January of 4.7 percent growth, 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 its pre-pandemic level.
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 UN revised its growth forecast for China from 7.2 percent to 8.2 percent.
Lead author Hamid Rashid, chief of the Global Economic Monitoring Branch in the UN Department of Economic and Social Affairs, attributed the upward revision to the robust investment in China in the last six months and the significant increase in merchant exports, such as electronics and electrical equipment, digital equipment and others.
The manufacturing support from China has been very robust and has exceeded the pre-crisis level. Investments in infrastructure and other domestic sectors are playing a very important role and China’s domestic consumption is expected to pick up a little bit more, he said.
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.”
Rashid told a news conference that “Europe’s outlook is not as bright as we expected“ because of signs of second and third waves of COVID-19 infections.
“The key challenge we face in the new variants and new mutations affecting large populations in South Asia, also in Latin America,” he said.
“That poses a significant challenge in terms of the recovery and world economic growth.”
Rashid said: “Vaccination is probably right now the number one issue to put the world economy on a steady path of recovery.” He noted, however, that “vaccine inequity is a serious challenge.”
In normal times, Rashid said, 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.”