GENEVA,
Switzerland
The global economy is set to grow by 4.7% 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%.
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, the report
said.
“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 report said.
Earlier this month, the OECD also revised higher its growth
forecast for this year to 5.6 % from 4.2 %.
However, the 22-page UNCTAD report called ‘Out of the frying pan…into the fire?’ said
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 % drop in
output as the spread of the corona-virus sparked lock-downs across the world.
It called the impact “exorbitant”, describing the “destruction
of income on an unprecedented scale” with people in developing countries
particularly hard hit.
Still, it says 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, the report said.
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Read the full UNCTAD report HERE
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