Global Economy: Advanced Economies Facing a Strong Upturn: DIW Economic Outlook Summer 2021

Abstract

Global recovery is progressing more slowly than was indicated in 2020 due to high coronavirus rates and related economic restrictions in Europe and Japan. Recently, a disparate picture has been forming: In the advanced economies, declining infection rates and continued progress in vaccination campaigns will presumably lead to a revival that will be especially noticeable in the retail and service sectors while the manufacturing industries will lag behind in the short-term due to high raw material prices. In some emerging economies, in contrast, recently skyrocketing coronavirus rates and a lack of vaccine doses are likely to hinder recovery before the situation improves. Overall, the growth rate should increase in the second half of 2021 so that the outlook for the global economy remains nearly unchanged: DIW Berlin estimates growth of 6.7 percent for 2021 and growth of 4.9 percent for 2022. The USA, euro area, and China are delivering positive momentum to this growth, as they have remained spared from a further wave of the virus.