After the coronavirus lockdowns of 2020 that spared essential businesses only, global economies tumbled by 10% to 30% – and sometimes more. The U.S. experienced a 31.4% reduction in GDP from the year before.
That information translates to an expected 4% GDP decrease worldwide. It’s one of the steepest declines on record.
The Trump Administration keeps saying that the economic recovery will take a V-shape. We dropped fast, but that’s also how we’ll rise – at least that’s the idea.
The truth seems to be a little different. With job losses still happening, unemployment claims high, and an economy struggling to restart, the economic outlook for 2021 looks more uncertain now than ever before.
Can the Global GDP Recover Its Losses in 2021?
The International Monetary Fund (IMF) predicts that the world will see a 5.4% increase in GDP for 2021. That’s after a projected 4.9% loss in 2020, and a 2.9% gain in 2019.
What is remarkable about the IMF’s prediction is that the United States is expected to have one of the worst economic recoveries in 2021. Out of all of the advanced economies charted, only Japan has less potential, at 2.7%
The IMF also averages all other advanced economies not listed individually at 4.2%, which is three-tenths lower than the 4.5% estimated for the United States.
That means Americans can expect a full point less than average when heading into next year’s economy.
It’s Not All Bad News for Americans
Although the U.S. economy expects a lower gain than other countries, Americans didn’t experience the same projected 2020 losses.
France has the highest 2021 estimate, with a projected 7.3% gain for the year. That’s after a 12.5% projected loss, which is four points higher than what Americans experienced.
If you were to average the net loss and net gain together, France’s recovery would be almost two points lower in power than the United States.
Japan is in a similar circumstance. Though half of the expected GDP gain of the United States, their economic power is offset by an estimated 5.8% loss in 2020.
Where the real economic influences are is China. The country expects a 1% GDP gain for 2020 while achieving 8% growth for the next year.