Listen to the Global Economic Outlook Discussion

We expect the second quarter to mark the beginning of a synchronized interval of global growth. Since the start of the year, China has held its momentum, U.S. progress slowed, and the U.K. and eurozone likely fell into lockdown-induced recessions. As vaccination progresses, we expect most of the world to join the growth parade. Already, measures like purchasing managers indices (PMIs) are showing strong recovery.

Yet the global recovery will not be complete until emerging markets return to their former levels of activity, and they are still struggling to contain the virus. Tourist economies are not working at their usual capacity, and markets dependent on oil imports are at the mercy of rising commodity prices. While improvement in advanced economies is welcome, a K-shaped recovery where developing countries are left behind is a risk to the global outlook.

Though there are reasons for optimism that the worst of the outbreak is in the past, COVID-19 remains at large, with new variants emerging. The following is our outlook on how major economies are poised for this year of reopening.

United States

    • After registering its deepest economic contraction since the Second World War last year, the U.S. economy is set to post its strongest year of growth in almost four decades. Expanding vaccination programs will allow for fewer public health restrictions and broad-based reopening. For the first time since the outbreak, the economic risks for the U.S. are tilted to the upside. Inflation will rebound, but won’t run out of control.