The global economy after the pandemic collapse may show a record rebound in eighty years, according to experts of the World Bank. The US and China will be the engines of global growth. Russian GDP will add less, but it will not be among the outsiders. The margin of safety should be accumulated by 2025 when experts predict the next crisis.
The coronavirus quarantine has paralyzed entire industries. Experts warned that the global financial collapse of 2008 could be repeated. But it turned out even worse. The economy has collapsed in a way it hasn’t since the Great Depression.
According to the World Bank, in 2020, world GDP declined by 3.5 percent, the UN counted 4.3. The crisis hit the developed countries hardest, which announced a hard lockdown.
The global economy lost $ 3.5 trillion, twice as much as in 2008. By the end of 2021, the losses will increase to seven trillion, according to the Organization for Economic Cooperation and Development. This compares with the combined annual budgets of the US (4.1 trillion) and China (3.2 trillion).
After a powerful fall, analysts predict an equally sharp recovery — the effect of a low base will work. According to a June report by the World Bank, global GDP will grow by 5.6% in 2021. First of all, due to the “strengthening — against the background of continued vaccination — of economic activity in several large countries.” Namely: in China (plus 8.5%), India (8.3), the United States (6.8).
“In the United States, all this relies on significant financial support,” the authors of the report added.
In low-income countries, the pandemic is eroding previous gains in the fight against poverty and contributing to the worsening of food shortages, experts say.
The economies of the United States, India, and Russia will reach pre-crisis levels by the end of the year. The World Bank expects Russian GDP to grow by 3.2% (in 2020 it was minus three, in the pre-pandemic 2018 and 2019-2.8 and two).
The main drivers in the World Bank consider the recovery of domestic demand and the rise in the price of energy. And among the main obstacles is slow vaccination. If the population is reluctant to vaccinate, the epidemic will continue.
Geopolitics, including the next US sanctions, also contributes to the negative.
The risks are also in the overheating of the mortgage market, which worsens the quality of assets and reduces the income of financial organizations.
The World Bank believes that the level of poverty in Russia will decrease, but by 2022 it will exceed the pre-pandemic indicators.