AllMarket Outlook
logoArgusMay 12, 2021

Daily Spotlight: Global GDP Recovery

Market Outlook
Bullish - Short term
Summary

The IMF is now forecasting global economic growth of 6.0% in 2021, as the world recovers from the impact of COVID-19 (which resulted in a global GDP contraction of 4.7% in 2020). Growth in 2022 is estimated at 4.4%. These are certainly outlier rates: Recent global growth rates include 2.9% in 2019, 3.6% in 2018 and 3.7% in 2017, as well as 3.1%-3.2% growth rates in 2015 and 2016. Those rates in 2015-2016 were perceived as low, but nothing compares to 2020. Looking out to 2021-2022, the IMF expects that emerging markets will grow at the fastest rates and is expecting a GDP increase of 6.0% in 2021 for these countries. Advanced economies are not expected to grow as fast, as the IMF is expecting a gain of 5.1% this year. India is expected to be the top grower, at 12.5%; China is expected to grow 8.4%. There are certainly risks to these forecasts. Several European countries have returned to recession. COVID-19 cases are soaring in India. The Japanese 10-year Treasury bond continues to yield 0%. Still, the general direction is higher.

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