What:  Euromonitor’s new expectations regarding recovery.

Why it is important:  Driven by the US and China, growth should be back earlier than previously expected. Europe is nevertheless expected to be lagging behind in terms of timing.

Euromonitor anticipates that, after revision, the global GDP growth might be the fasted in more than 40 years, at +5.8%, followed by a 4.5% growth in 2022. This upgrade, compared with previous estimates, is mainly driven by advanced economies in general, and the US in particular, thanks to its vaccine deployment and fiscal stimulus measures. In developing economies, China, Mexico and Turkey are also expected to achieve more than initially forecasted.

Euromonitor places itself in a forecast that is in between the most optimistic scenario (planning a 10% GDP growth in 2022 and a 15% in 2023, both compared to 2019) and the less pessimistic one (GDP growth not reaching 10% in 2023), while the most pessimistic scenario plans a positive growth in 2023 only. All scenarios are based on potential new regional outburst of the pandemic (a global lockdown such as the one experience in 2020 is considered as highly unlikely).

Regarding the general situation country by country:

• The US is expected to exceed 2019 levels by Q2 2021 and GDP to increase by +6.7%, followed by +4.3% in 2022. Thanks to the vaccination levels, people’s movement in retail and recreation are now just -3% compared to prepandemic period.
• China grew by +18.3% during Q1 2021 compared with 2020, with industrial index growing by +24.5% and exports by +38.7%. GDP is expected to grow by +8.6 in 2021, and government is setting up regulations to avoid unsustainable growth.
• Japan is expected to grow by +3% in 2021, and by +2.3% in 2022. Fiscal incentives decided by the government are facing slow vaccination roll out and questions about the success, or not, of the Tokyo Olympic Games.
• Europe is expected to grow by +3.9% in 2021 and 2022, -3% compared to its prepandemic forecast. Recovery is slowed down by disparity of situations and counter measures in member countries. Nevertheless, a strong recovery is expected to take place in the second half of 2021.
• The UK contracted by a record -9.9% in 2020 and forecasts for 2021 are +5.5% and +5.2% in 2022, based on the success of the vaccine roll out.

Overall, Euromonitor considers that many risks are decreasing, among which:

• Vaccination pessimism
• China – US all out trade war
• Eurozone recession.

Global Economic Forecasts