2021 World Economic Outlook

As 2020 draws to a close, prospects for economic recovery next year are emerging. The IMF projects that the global economy will shrink by 4.4% in 2020, followed by a 5.2% rebound in 2021, supporting a V-shaped recovery.

Source: IMF

For the moment, whether the global economy will grow beyond 5% in 2021 depends on the following uncertainties:

- Covid-19

- China-US trade war

Resurgence of Covid-19

So far, Covid-19 infections are increasing to varying degrees in Asia, America, and Europe, with the epicenter shifting from developed countries to emerging markets. Surging cases have raised fears of another downturn in the world economy and put pressure on central banks and governments. Economists from Wall Street believed another recession will rage the US, Eurozone, and Japan, both this quarter and next. Global economic growth in 2021 could be far below expectations if mass vaccinations won't be available soon.

Source: Bloomberg

New Owner of White House May Extend China-US “Cold War”

As the US election winds down, challenges remain ahead of China-US trade. While Trump likes to use tariffs as a weapon in trade wars, Biden believes that tariff wars are not a good method and may use trade dispute resolution mechanisms, collective bargaining, and domestic tax policies to support American companies, said Imogen Page-Jarrett, a research analyst at the Economist Intelligence Unit. With this in mind, the bilateral relations are bound to deteriorate over time as the trade war will continue in various forms.

Biden won the election

Any adverse changes in the above two concerns may turn drag 2021s global economic recovery below expectations, turning the V-shaped trajectory to a U-shaped or Nike swoosh pattern. Under such an economic backdrop, investors should be alert to potential risks. As a leading media in the forex industry, WikiFX has integrated forex news feed, forums, exposures, broker information query, and other functions. Please download the WikiFX App for detailed financial information: bit.ly/wikifxIN