After a pause in the first quarter of 2021, the global economic expansion has resumed in the second quarter, lifting output above its pre-pandemic high. Recovery from the recession—which saw world real GDP plunge nearly 10% from the fourth quarter of 2019 to the second quarter of 2020—has taken four quarters. Robust growth in the United States and mainland China led the recovery. After a contraction of 3.5% in 2020, global real GDP is projected to increase 5.3% in 2021 and 4.3% in 2022 before settling to a 3.1% growth pace in 2023–25.
Yet, this recovery milestone comes as the World Health Organization reports a record high in weekly incidence of COVID-19 cases in mid-April, underscoring the reality that the pandemic continues to suppress economic activity in many parts of the world. About 90% of new infections are spread evenly across Europe, southeast Asia, and the Americas. Indeed, new lockdowns of nonessential activity pose a downside risk to India’s outlook.
The forecast assumes that the COVID-19 pandemic will recede in response to increasing vaccination rates, improved treatments, and seasonal effects, enabling affected economies to reopen. By July, the world will reach an inflection point at which the most vulnerable populations are protected in countries with sufficient vaccine supplies, mortality is reduced, hospitalizations are manageable, and non-pharmaceutical interventions are less critical. In some countries, the point at which 20% of the population is vaccinated—the minimum rate to fend off the worst effects of the pandemic—may be delayed until the end of 2021.