UN raises global growth forecast upward to 5.4pc

The United Nations on Tuesday responded to the rebounding Chinese and U.S. economies by revising its global economic forecast upward to 5.4 percent growth for 2021, but it warned that surging coronavirus disease infections and inadequate availability of vaccines in many countries threaten a broad-based recovery, AP reports

In raising its projection from January of 4.7 percent growth, the U.N.’s mid-2021 World Economic Situation and Prospects report pointed to the rapid vaccine rollout in a few large economies led by the U.S. and China and an increase in global trade in merchandise and manufactured goods that has already reached its pre-pandemic level.

But the U.N. cautioned that “this will unlikely be sufficient to lift the rest of the world’s economies,” and “the economic outlook for the countries in South Asia, sub-Saharan Africa and Latin America and the Caribbean remains fragile and uncertain.”

Lead author Hamid Rashid, chief of the Global Economic Monitoring Branch in the U.N. Department of Economic and Social Affairs, told a news conference that “Europe’s outlook is not as bright as we expected” because of signs of second and third waves of coronavirus disease infections.

“The key challenge we face in the world right now is that infections are still rising in many parts of the world, and we are seeing new variants and new mutations affecting large populations in South Asia, also in Latin America,” he said. “That poses a significant challenge in terms of the recovery and world economic growth.”

Rashid said: “Vaccination is probably right now the number one issue to put the world economy on a steady path of recovery.” He noted, however, that “vaccine inequity is a serious challenge.”

In normal times, he said, 5.4 percent would be considered a very high economic growth rate, but this year it is barely offsetting last year’s losses and growth is “very uneven and also very uncertain.”

He said the U.N. expects the U.S. economy, which is very strong, to grow about 6.2 percent this year, “the fastest growth of the U.S. economy since 1966,” and it expects the Chinese economy to grow by about 8.2 percent.

But he called India, Brazil, South Africa and many other developing countries “weak spots.”

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