Vaccines to the Rescue: Two-Year World Outlook

The Conference Board of Canada, May 13, 2021
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This quarterly examination of the short-term economic outlook for the world’s major economies also contains an in-depth analysis of a number of issues that are relevant for understanding world economic trends and developments.

Document Highlights

  • The world economy will expand by 5.3 per cent this year and 4.0 per cent in 2022. Last year, the global economy contracted by 3.7 per cent—worse than the decline during the severe 2008–09 recession.
  • The recovery in the global economy is being led by the rollout of vaccines and massive fiscal and monetary stimulus.
  • Weak leadership and less than adequate health care systems have hurt the economic recovery in Latin America. However, the region will benefit from solid recoveries in the U.S. and Chinese economies.
  • Bureaucratic bungling and political infighting have delayed vaccinations in the EU at a time when variants of the virus are spreading. Consequently, the economic recovery in the EU will lag behind the U.S. and elsewhere.
  • The Asia-Pacific region posted the lowest drop in economic activity in 2020 and will lead the global recovery. China’s sharp rebound in growth has boosted import demand and benefited the entire region.
  • A “vaccine passport” could help revive the global tourism industry, but the idea of such a document is controversial. China is considering a vaccine passport for the Winter Olympics in 2022.

Table of Contents

Key findings

Countries recovering at their own speed

U.S. outlook: Surge in growth led by vaccines and ongoing government stimulus

Poor response to COVID-19 hurting Latin America’s recovery

Bureaucratic delays hurt outlook for the EU

Superior handling of COVID-19 boosts economic prospects in Asia-Pacific

Could the Chinese economy collapse?

Appendix A—Methodology and assumptions

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