Global economic activity is set to rebound in 2021

Latin America’s economy is poised to recover in 2021

The regional economy should recover from the pandemic-induced downturn in 2020

The regional economy is forecast to recover well in 2021 from this year’s sharp contraction

The regional economy is forecast to recover well in 2021 from this year’s sharp contraction, with domestic demand set to be buoyed by an uptick in consumer and capital spending. However, the spike in Covid-19 cases in Europe and the U.S. casts a shadow over the outlook, potentially dragging on regional exports to key markets at the outset of the year.

East Asia economic growth is seen accelerating markedly in 2021

Growth is seen accelerating markedly in 2021 as the regional economy shrugs off the effects of the pandemic and external demand rebounds. Ample fiscal and monetary stimulus in the region should further support the rebound, while a less volatile U.S. trade policy under a Biden administration bodes well for exports. Covid-19-related uncertainty clouds the outlook, however.

The economy logged the strongest quarterly GDP expansion on record in Q3

The economy logged the strongest quarterly GDP expansion on record in Q3, as the easing of containment measures allowed households and businesses to resume activity. Moreover, countercyclical fiscal measures and an ultra-loose monetary policy supported the rebound. Moving to Q4, momentum seems to have waned due to the reintroduction of restrictions in several countries to counter the second wave of Covid-19. A sharper contraction in the services sector in October, coupled with worsening consumer sentiment, points to cooling activity in the tertiary sector. On the other hand, business sentiment in the industrial sector and manufacturing activity improved in the month. Meanwhile, in mid-November, Hungary and Poland blocked the 2021–2027 EU budget and recovery fund, opening the door to further negotiations, while the EU’s Single Resolution Board urged banks to prepare for soaring levels of non-performing loans.

After this year’s coronavirus-induced slump in activity, regional GDP is set to return to growth in 2021. Private consumption and investment activity should bounce back, partly boosted by fiscal relief measures, while returning foreign demand should support exports. Uncertainty regarding the pandemic’s trajectory clouds the outlook, however.

Next year, the regional economy is expected to recover from the Covid-19-induced downturn, with the reopening of economies set to buttress domestic and foreign demand. That said, job losses will limit private consumption growth. Furthermore, potential further waves of infections cloud the outlook, while fiscal space to respond to the fallout varies across the region.

Regional GDP is seen rebounding next year, after this year’s expected contraction due to Covid-19. With widespread vaccination likely  to begin in early 2021, a revival in consumer spending should underpin the recovery, with fiscal stimulus cementing the upturn. Moreover, firmer foreign demand should boost exports. Geopolitical uncertainty clouds the outlook, however.

The MENA economy should rebound notably next year. Domestic demand is set to increase strongly due to a low base effect and as oil-exporting countries are supported by recovering demand for energy exports. That said, geopolitical tensions, fragile fiscal positions and volatile oil prices due to uncertainty around the pandemic pose downside risks.

The region to suffer its worst contraction on record this year