The global economy will grow 4.7% this year thanks to a stronger-than-expected recovery in the United States, according to a report from the UN Conference on Trade and Development. The previous forecast was 4.3%.
The report said an upward revision of the previous forecast, made in September last year, has driven the expected rise in US consumer spending amid progress in COVID-19 vaccine distribution and an extensive stimulus package.
“The global economic recovery, which began in the third quarter of 2020, is expected to continue until 2021, albeit with a high degree of unevenness and unpredictability, reflecting epidemiological, political and coordination uncertainties,” the report said.
Earlier this month, the OECD also raised its forecast for global GDP growth for this year from 4.2% to 5.6%.
However, the UN warns that COVID-19 will have long-term economic consequences that will require continued government support. The report says the main risk to the global outlook is “a misguided return to austerity.”
The UN estimates that production fell 3.9% last year as the spread of the coronavirus caused lockdowns around the world.
The report described the impact as “exorbitant,” presented as an “unprecedented decline in income,” especially hard hit in developing countries.
However, it says it would be worse if central banks did not take proactive action to avoid financial collapse. The report also says relief packages and a rebound in commodity prices, as well as accelerating vaccine development, have helped.