China’s production is expected to exceed 2019 levels this year
The Covid-19 pandemic will produce lasting changes in global growth, pushing China even further to the forefront.
The share of global growth coming from China is expected to rise from 26.8% in 2021 to 27.7% in 2025, according to Bloomberg calculations using data from the International Monetary Fund.
That’s more than 15 and 17 percentage points, respectively, higher than the US share of expected global production. India, Germany and Indonesia round out the top five growth engines next year.
The fund now forecasts that global gross domestic product will contract 4.4 percent this year, an improvement from the 4.9 percent drop seen in June, according to the latest World Economic Outlook released this week. Next year, the IMF expects growth of 5.2%.
The IMF estimates that China will grow 8.2 percent next year, one percentage point below the IMF’s April estimate, but strong enough to account for more than a quarter of global growth. The US is expected to rebound to a 3.1 percent rise, accounting for 11.6 percent of global growth in 2021 in purchasing power parity terms.
By 2025, the cumulative loss of production relative to the projected trajectory before the pandemic is projected to increase to $ 28 trillion.
“While the world economy is coming back, the rise is likely to be long, uneven and uncertain,” Gita Gopinath, the IMF’s director of research, wrote in the report.
The five nations with the highest COVID-19 death counts – the US, Brazil, India, Mexico and the UK – are projected to see a total decline in GDP of nearly $ 1.8 trillion in nominal terms and $ 2.1 trillion after being adjusted for differences in purchases. power.
Living standards
Extreme poverty is projected to increase for the first time in more than two decades, and persistent production losses imply a major setback to living standards compared to the days before the pandemic, the IMF said.
“The poor are getting poorer and about 90 million people are expected to fall into extreme deprivation this year,” said Ms Gopinath.
In January, before the coronavirus began to spread widely, the IMF estimated global growth of 3.3% this year and 3.4% in 2021.
Russia, the ninth largest contributor to total growth in 2021, is poised to climb to fifth place in five years as Germany’s economic growth slows.
After the rebound in 2021, global growth is expected to gradually slow to around 3.5 percent in the medium term, according to the report.
With the exception of China, where production is expected to exceed 2019 levels this year, production in both advanced economies and emerging market and developing economies is forecast to remain below 2019 levels even as next year.
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