India, China and the US to lead the recovery
The good economic momentum, from Q2 2021 onwards, is set for a rapid business recovery driven primarily by the SARS-CoV-2 vaccination campaigns.
Fast-track immunisations are becoming a cornerstone for the return of both consumer and investor confidence, two essential drivers of growth.
In early March, the Organisation for Economic Co-operation and Development (OECD) reassessed the global outlook, with a positive forecast of a much more robust global GDP than it had predicted for this year.
Growth has been revised by more than one percentage point to around 5.6% in 2021, together with the IMF (estimated at 5.5%), which is the most encouraging forecast of all because the World Bank forecasts it at 4%.
Basically, there are several variables to be considered by the OECD: 1) the progress of the anti-COVID immunisation campaigns, more and more countries are receiving the vials and more pharmaceutical companies are joining in with their respective serums to fight the coronavirus; 2) an economic boom is on the horizon, although it will be uneven, it will detonate the service sector again, especially in terms of tourism and mobility; 3) a recovery in consumer and business confidence, most notably in terms of spending levels; 4) the US economy is expected to recover, although it will be uneven; 4) the US economy will benefit from a rapid boost from President Joe Biden's administration, thanks to the US Rescue Plan launched in early March; 5) more and more governments are implementing direct stimulus programmes for both the macro and micro economy; and 6) global production is returning to normal after months of supply chain disruptions; trade and industrial production have been on the rise since the end of last year.
The agency, chaired by Angel Gurría, believes that the key to consolidating the recovery will be to act quickly; although there will not be a smooth exit for all countries, many indicators will return to their pre-pandemic pace.
"Accelerating the production and deployment of vaccines is the best economic policy we have today to return our economies and employment to growth," he says in his latest report.
OECD's March Interim Economic Outlook analyses that India's GDP in 2021 will be 12.6%, virtually the only country with such a dynamic, followed by China with a GDP of 7.8%, and in third position, the US with a GDP of 6.5%.
Other G7 and G20 countries, such as Turkey (5.9%) and several European countries such as France, Spain and the United Kingdom will also grow by more than 5%.
The outlook for Argentina, Mexico and Brazil is equally promising with GDP growth of approximately 4.6%, 4.5% and 3.7%, respectively; much of Mexico's production could suffer a better performance as the United States achieves greater and faster expansion.
Overall, the path is a long-awaited and expected rebound, some sectors will tend to a faster exit, the OECD itself believes that world output will reach pre-pandemic levels by mid-year.
"The outlook for growth would improve (upside scenario) if the production and distribution of doses accelerates, is better co-ordinated around the world and gets ahead of virus mutations," the international organisation notes.
The bad times must be put behind us, the balance of 2020, ranging from a 4.3% drop in global GDP according to the World Bank or a 3.4% contraction according to the OECD, however, not all were lost in the tide of the debacle caused by the health emergency and the collateral damage to the socio-economic fabric: China would have closed last year with a GDP of 2.3% and Turkey of 1.8%.