Better Global Growth Forecast for 2021

The IMF is now forecasting global growth of 5.2% for 2022 -- a rebound from the expected global GDP decline of 4.9% in 2020 (due to the impact of COVID-19). The IMF expects that emerging markets, led by India and China, will grow the fastest (at an average rate of 6%). India and China are expected to grow 8.8% and 8.2%, respectively. Developed economies are expected to grow at an average rate of 3.9%. The IMF forecasts that the Eurozone will grow at a 5.2% clip, above the rate of growth of the U.S., which is forecast at 3.1%. We take this forecast with a grain of salt, as catalysts for economic weakness abound in Europe, including Brexit, negative interest rates, and PMI readings below 50. While two of the BRICS have bright outlooks, the other two (Brazil and Russia) are forecast to grow at roughly 2.5% rates. Japan brings up the rear, with an outlook for GDP growth in 2021 of 2.3%. Much of the global recovery in GDP will depend on the distribution of COVID-19 vaccines. We anticipate that wealthier nations will have more success acquiring, storing and distributing vaccines.