KUALA LUMPUR – The global real gross domestic product (GDP) is expected to rebound 5.7% this year, said Moody’s Analytics, following the historic 3.6% contraction in 2020.
It said the relatively strong outlook is based on the passage of the new fiscal stimulus in the United States (US), a firming revival in Europe and material improvement in the global vaccination momentum.
“However, global recovery will continue to be uneven across regions, and the dual-track recovery will persist until new (virus) resurgences are brought under control and the global vaccine distribution is scaled up,” it said in its Global Outlook: Resurgence Risks to Recovery report released today.
Moody’s said the US is expected to lead the gains with a strong 6.4% rebound this year, followed by Asia with 6.1%, anchored by China’s stabilising growth and India’s turnaround in the post-restrictions phase.
Conversely, African economies are likely to see slower growth at 4.3%, following the record 3% decline last year.
The research firm also noted that the ongoing lockdowns worldwide underscore the fragility of recovery and varied challenges in getting economies on a sustained recovery path.
“In severely impacted countries, such as Malaysia and the Philippines, restrictions have lacked effectiveness in containing outbreaks, thereby mandating an extension of inhibiting curbs.
“While other countriess, such as Indonesia, have adopted a less conservative approach, there is a real risk that the economic costs of relaxing restrictions too soon may significantly outweigh the short-term gains from reopenings.”
Moody’s also opined that geopolitical risks will assume an important role in the post-Covid-19 recovery phase.
“Not only will the prolonged US-China tensions shape investor preferences, but evolving geopolitical dynamics among the large economies in the Asia-Pacific region could also have significant ramifications on global trade and investment.
“This is against the tense backdrop of technology and security-driven disputes and larger rhetoric of diversifying supply-chain dependencies away from China.” – Bernama, August 19, 2021
