A general view of the Manhattan skyline is seen on March 14, 2021 from Weehawken, New Jersey.
(ED JONES / AFP)
GENEVA – The global economy is set to grow by 4.7 percent this year thanks to a stronger-than-expected recovery in the United States, a report by the UN Conference on Trade and Development (UNCTAD) said on Thursday, revising up its previous forecast of 4.3 percent.
The upwards revision from its previous forecast made last September factors in an expected boost in US consumer spending on the back of progress distributing COVID-19 vaccines and a vast stimulus package, according to the report.
The global recovery that began in the third quarter of 2020 is expected to continue through 2021, albeit with a good deal of unevenness and unpredictability, reflecting epidemiological, policy and coordination uncertainties.
“The global recovery that began in the third quarter of 2020 is expected to continue through 2021, albeit with a good deal of unevenness and unpredictability, reflecting epidemiological, policy and coordination uncertainties,” reads the report.
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Earlier this month, the OECD also revised higher its growth forecast for this year to 5.6 percent from 4.2 percent.
However, the UNCTAD said in the 22-page report, called ‘Out of the frying pan…into the fire?’, that COVID-19 will have lasting economic consequences that will require continued government support. It said the main risk to the global outlook is a “misguided return to austerity”.
The report estimates that last year there was a 3.9 percent drop in output as the spread of the coronavirus sparked lockdowns across the world.
The UNCTAD called the impact “exorbitant”, describing the “destruction of income on an unprecedented scale” with people in developing countries particularly hard hit.
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Still, the UN body said it would have been worse had central banks not taken preemptive action to avoid financial meltdown. Relief packages and a bounce-back in commodity prices as well as the fast-tracking of vaccine development also helped, according to the report.