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Decades of unprecedented recovery in the world economy could begin this year, as the global coronavirus vaccination campaign is expected to return life to normal, London financial analysts predict in their recent forecast for 2021.
On the first day of each year, the Center for Business and Economic Research (CEBR) compiles its comprehensive global economic forecast for the next twelve months. CEBR analysts said in a forecast released this year on Friday that they expect much of the world to “return to normal” this year as vaccine use becomes more widespread, leading to a revival in consumption that was suppressed on last year because of the coronavirus epidemic.
This could lead to price increases and even deficits in many areas, especially in the service sectors, as supply will not necessarily be able to keep up with the sudden increase in demand.
People really want to travel
CEBR expects this to be particularly true in the field of tourism, as many people who were unable to go on vacation last year due to restrictions and cannot take ski excursions, for example earlier this year, are eager to travel. or visit loved ones.
Based on all of this, the best resorts, flights, and hotels are likely to be fully booked by the second half of the year. This can also lead to price increases, partly because costly precautionary and distance measures are expected to be needed, but also because, amid unprecedented demand, tourism businesses will try to absorb the losses they have suffered over the year. and a half above.
They predict growth not seen in 45 years
Tourism generates 10 percent of the world’s gross domestic product (GDP), so the recovery of the sector will give a boost to the world economy as a whole.
In this environment, CEBR analysts expect the value of world-class GDP, which they calculated fell 4.4 percent last year, will rise 5.3 percent this year. The last 45 years ago, in 1976, there was the same annual growth rate in the world economy.
Brits can be happy too
The CEBR expects that due to similar factors, the growth rate of the British economy could break a record for many decades this year. The UK’s gross domestic product fell 11.4 percent last year. However, at the time of the epidemic, additional savings of 200 billion pounds (82 billion guilders) were generated in the British domestic sector, and if this shows up as an expense this year, the UK GDP could grow around from 8 percent in 2021, according to CEBR’s forecast.
According to the historical perspective of the analyst firm, the British economy did not produce this or similar rates of growth in the last century until 1915, 1927, 1940 and 1941.
Hey, but it will be good this year
Oxford Economics, for example, in its new forecast has raised its global growth forecast for 2021 from the 4.9% it had previously expected to 5.2%. This will be stronger growth than that achieved by the world economy after the global financial crisis in 2010 and will also exceed the pace of recovery from the recessions of the 1980s and 1990s, respectively. Average global quarterly growth for this calendar year will be the highest since 1978, MTI wrote, citing the forecast.
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