How the market is recovering: the global economic market forecast
After the global economy fell during the pandemic, countries began to recover intensively. As a result, demand rose to record levels that not all segments could cope with. Analysts at the World Bank have put together a forecast of global economic growth. They suggest there will be a powerful rebound in the market, the maximum in 80 years. The main drivers will be the US and China, while Russia’s GDP will grow much less than forecasted in advance. However, there is no time to bounce back as the global market may face another crisis in 2025.
During the pandemic, entire industries stagnated, and experts initially warned that we should expect a financial crisis in 2008. In reality, however, the situation turned out to be even more serious – the economy sagged to the levels seen during the Great Depression.
According to the World Bank, in 2020 GDP fell by 3.5%, and the UN says about 4.3%. The countries that have suffered the most from the crisis are those that have been shut down for months at a time of full lockdown.
Despite initial pessimistic forecasts, Russia coped with the difficulties, but the consequences of the crisis are still being felt. The economy was saved by the fact that the pandemic began when the inflation rate in the country was relatively low, as well as the unemployment rate. In addition, the banking sector was developing quite steadily and was provided with a significant reserve of financial assets.The crisis has caused the global economy to lose $3.5 trillion. This figure is 2 times higher than the losses that were recorded during the 2008 crisis. By the end of 2021 the losses exceeded 7 trillion dollars, which is the total annual budget of the U.S. and China.
However, after the sharp market decline came an intense recovery, last year global GDP increased by 5.6%. The main role in this was played by the vaccination program, which took place en masse in most developed countries. In addition, a number of countries showed record economic activity, with China, the U.S. and India leading in this category.
As for the poor countries, the situation here is not so bright – the pandemic has exacerbated the problems that were observed before. The fight against the pandemic has increased food shortages and unemployment.
Experts predict that by the end of this year Russia will reach pre-crisis indicators. GDP growth will be 3.2%, for comparison – in 2019 it was 2.8%.
Analysts believe the main drivers of economic recovery are an increase in demand on the domestic market and the rise in world energy prices. However, slow and inefficient vaccination can slow down the pace of development.