Global activity would rebound in 2021 as the health situation gradually improves. The United States would catch up in 2021 with the level of activity in 2019, Germany would regain it in 2022, while Spain and Italy would remain below it by that time. World trade rebounds in 2021, supported by the normalisation of industrial production, and trade increases in 2022 with activity. The evolution of the health situation is the main hazard.

Following a contraction of a scale not seen since the Second World War (–3.4%), the world economy is expected to bounce back strongly in 2021 (5.3%). This rebound will come mostly from the gradual exit from the global pandemic, as productive capacity was well protected by very comprehensive support measures. However, the recovery will be experienced unevenly across countries. While emerging economies as a whole, along with the United States, are expected to restore economic activity to 2019 levels before the end of the year, advanced economies overall will not manage to do the same until 2022.

The euro area economy is expected to regain ground lost to the crisis by 2022, but recovery will again be unevenly spread across the region. While the German economy is expected to recover quickly to 1.8% above 2019 levels by the end of 2022, Spain (–0.9%) and Italy (–1.6%) will not reach pre-crisis levels over this period.

The US experienced a milder shock than Europe in 2020. Economic activity is expected to recover to levels 4.9% higher than in 2019 by the end of 2022, helped by considerable fiscal stimulus. The UK economy, already coming to terms with the effects of Brexit and hit hard by the pandemic in 2020, is forecast to be 1.5% smaller in 2022 than in 2019.

After falling sharply, global trade in goods recovered quickly in the second half of 2020 and is expected to continue to rebound in 2021 in line with industrial production, with forecast growth of 8.7% (–6.3% in 2020). Trade is expected to grow by 4.8% in 2022 as the world economy recovers.

However, considerable uncertainties remain, and health improvements will be crucial. The recovery will also depend on labour market developments and firm dynamics, as well as continuing favourable financial market conditions.