Recently the International Monetary Fund released new forecasts for economic growth for the world and for each country. They make for better, more hopeful reading than 12 months ago when COVID-19 was first hitting the countries of the world. The IMF says that ‘Global prospects remain highly uncertain one year into the pandemic. New virus mutations and the accumulating human toll raise concerns, even as growing vaccine coverage lifts sentiment. Economic recoveries are diverging across countries and sectors, reflecting variation in pandemic-induced disruptions and the extent of policy support.’
The good thing is that the decline in economic growth in 2020 was not quite as fierce as the IMF predicted in April 2020 or in October 2020. As well, the rebound in economic growth in 2021 and in 2022 is predicted to be stronger than the IMF expected in October. After a contraction of 3.3% in the global economy in 2020 (and a 4.7% drop in the advanced economies), the IMF now expects the global economy to grow by 6% in 2021 and then by 4.4% in 2022. The advanced economies are expected to grow by 5.1% in 2021 and by 3.6% in 2022. For China, the IMF estimates that economic growth slowed to 2.3% in 2020 and will rebound by 8.6% in 2021 before returning to the pre-COVID growth rate of 6% in 2022.
The variation in the recovery from the pandemic between countries is best illustrated by which year the economies of each of the major wool consuming country will be back to or above the pre-pandemic 2019 levels. The economies of China, the US and Korea will all be back to or greater than the 2019 level this year (2021). Japan, Germany and France will be back to 2019 levels in 2022, while the UK will be back to the 2019 level in 2023. Italy’s economy is the worst affected of the major wool consuming countries and won’t be back to 2019 levels until 2023.
Further details, including a chart showing the forecasts of economic growth in the eight major wool consuming countries weighted according to the estimated wool consumption, are provided in this week’s edition of the NCWSBA Weekly Newsletter.