Global activity should rebound significantly in 2021 thanks to vaccination campaigns and fiscal and monetary support measures. The United States would catch up with the 2019 level of activity as early as 2021, while European countries would regain it between the end of 2021 and the end of 2022 depending on the country. World trade would rebound in 2021, supported by the recovery in global activity, and continue to grow in 2022. The evolution of the health situation remains the main hazard.

In 2021, the global economy is expected to rebound sharply by 6.0% and economic activity is projected to return to pre-pandemic levels, underpinned by vaccine rollouts and fiscal and monetary policy support measures. Global growth is envisioned to reach a still-strong 4.5% in 2022. The pace of the recovery is likely to be uneven: the US and major emerging economies – China, India, Brazil and Russia – are projected to recover to their pre-crisis levels on an annual average basis in 2021, while other major advanced economies – Germany, Italy, Spain and the UK – are not expected to see a recovery until 2022.

Hindered by pandemic restrictions put in place in 2021, economic activity in the euro area is not forecast to surpass pre-pandemic levels until 2022, by 2.3% above its average 2019 level. Germany is projected to see a quick recovery and Italy will also likely return to its pre-crisis level, whereas Spain is expected to barely regain it.

The UK was hard hit by the pandemic and the impact of Brexit in 2020, but the country is expected to grow by a strong 7.0% in 2021 and exceed its 2019 average level in 2022 (by 1.5%). The US, which experienced a lesser decline in activity than Europe in 2020, is forecast to report sharp growth in 2021 (up 6.2%) and 2022 (up 4.4%), fuelled by substantial fiscal support.

Global trade in goods is forecast to recover in 2021, increasing by 11.4% after a 6.7% contraction, underpinned by the rebound in global economic activity. Trade in services, however, is expected to feel the lasting effect of the shock to tourism. Catch-up effects are projected to fade in 2022 and goods trade looks set to rise by a moderate 5.0%.

This scenario is subject to considerable uncertainty, on both the upside and the downside. Beyond pandemic-related developments, the strength of the rebound will depend on the size and timing of fiscal support programmes and on lasting accommodative financial conditions.