Global economic recovery is accelerating, buoyed by vaccinations

Karen Dynan (PIIE)
Global economic recovery is accelerating, buoyed by vaccinations


The global economy is poised for a substantial pickup in economic activity for the rest of 2021 and 2022. World GDP is on track to grow 5.6 percent in 2021, with a further 4.4 percent rise in 2022. But varying fiscal policy responses to the pandemic, vaccination rates, and underlying factors will influence growth rates across countries.

The United States is expected to expand the fastest out of the advanced economies in 2021, due in part to its aggressive fiscal stimulus. A resurgence of the virus in Europe and the smaller fiscal response will cause EU growth to lag, but the recovery should accelerate once vaccinations are scaled up and consumer spending returns in the latter half of 2021. Economic recovery in Japan and the United Kingdom are hindered by the decision to bar foreign visitors from the Tokyo Olympics and the Brexit transition.

Among emerging economies, China and India lead the recovery, with real year-over-year GDP growth for 2021 expected to reach 8.5 percent and 10.5 percent, respectively. Brazil is the only major economy forecast to contract in 2021, as a resurgence of the virus and the strained healthcare system weigh heavily, but modest year-over-year growth will return in 2022.

This PIIE Chart was adapted from Karen Dynan’s blog, “Global economy poised to expand faster, buoyed by vaccinations.”

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