Global economy to grow 5.3% in 2021, with activity still below pre-pandemic levels – BBVA

The global economy has been pushed and pulled between two opposing forces: the brutal shock of the pandemic and the overwhelming response of both monetary and fiscal economic policies, explained economists at BBVA Research. They see this will continue in 2021. 

Key points:

“The severe recession in the second quarter of the year was followed by a better-than-expected recovery in the third quarter. This recovery was then halted in October as a result of a second wave of the pandemic, which in turn prompted new stimuli. Aside from the increase in the infection rate at the end of the year, there is also now uncertainty surrounding the potential spread of more contagious strains of COVID-19 from their places of origin (mainly the United Kingdom) to the rest of the world, which points to a slow recovery in the short term.”

“Among the positives over the next twelve months will be the disappearance of uncertainty over the Brexit deal, the resilience of the Chinese economy and its global pull in the manufacturing industry, which has been a stabilizing factor in the rest of the world.”

“We will have witnessed a highly volatile economy across 2020 and 2021, with the economy shrinking by an average of 2.6% in 2020 and predicted to grow by an average of 5.3% in 2021 globally, meaning we will still be some way off reaching pre-pandemic activity levels. The recovery is expected to continue strongly in 2022 (global growth of 4.1%), with much less uncertainty surrounding the health situation and with fiscal programs booming, which will be needed to offset the economic destruction of the pandemic.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD falls toward 1.19 after robust US Nonfarm Payrolls data

EUR/USD is trading above 1.19 after dipping below that number in response to the US Nonfarm Payrolls, which showed an increase of 379K jobs in February. Higher yields in response to Powell are keeping the dollar bid.


GBP/USD recovers after post-NFP dip below 1.38

GBP/USD is trading above 1.38 bus till down the day. The US gained 379.000 jobs, roughly double than expected and supporting the dollar. The Senate's stimulus debate is eyed.


XAU/USD battles 1700 level

Gold is staging a rebound toward $1,700 amid proift-taking ahead of the weekend but remains on track to close the third straight week in the negative territory.

Gold News

Ethereum price primed for a swift recovery as the network prepares for a major update in July

Ethereum price aims for a significant recovery towards $2,000. A major upgrade scheduled for July intends to fix the problem with gas fees on Ethereum. ETH miners are not happy with the decision.

Read more

US Dollar Index pushes higher to 92.20 on stellar Payrolls

The march north in the greenback remains unabated and trade in fresh 2021 highs beyond the 92.00 hurdle when tracked by the US Dollar Index (DXY).

US Dollar Index News