Global GDP is forecast to decline by 4.5pc in 2020 from the prior year, while it is expected to grow by 5pc in 2021, according to OECD’s Interim Economic Outlook for G20 countries. The forecasts are a bit better than OECD’s June Outlook amid better-than-expected outcomes in the first half of 2020 (H1) in China and the US, and prompt policies by governments to mitigate the impact of the COVID-19 pandemic.
China’s GDP is forecast to grow by 1.8pc in 2020 from the prior year and the only G20 nation which will record growth this year. In 2021, China is expected to grow by 8pc, compared to 6.1pc GDP growth in 2019. In Q2, China’s economy recovered steadily and the growth is expected to accelerate further in H2 2020.
Most countries are likely to be below 2019 growth levels even in 2021. The G20 block is forecast to show a degrowth of 4.1pc in 2020 and a growth of 5.7pc in 2021. A resurgence in the pandemic has slowed the initial recover momentum and weaken business and consumer confidence, globally. Consumption recovery is uneven across countries as per retail sales and consumer expenditure data. China, Brazil, Germany, France and the UK have reported improved consumption in July.
The US GDP is expected to drop by 3.8pc in 2020 and grow by 4.0pc in 2021. For India, OECD has projected a 10.2pc drop in GDP growth in 2020, while a 10.7pc growth is expected in 2021.
| OECD’s Interim Economic Outlook | ||
|---|---|---|
| Country | 2020 | 2021 |
| China | 1.8 | 8 |
| US | -3.8 | 4 |
| Canada | -5.8 | 4 |
| Euro area | -7.9 | 5.1 |
| UK | -10.1 | 7.6 |
| Japan | -5.8 | 1.5 |
| Korea | -1 | 3.1 |
| India | -10.2 | 10.7 |
| Brazil | -6.5 | 3.6 |
| Mexico | -10.2 | 3 |
| Russia | -7.3 | 5 |
| Turkey | -2.9 | 3.9 |
| Indonesia | -3.3 | 5.3 |
Second quarter
Pandemic control measures suppressed economic activities in most G20 countries in the second quarter (Q2). China’s GDP recorded the highest growth of 3.2pc in Q2 from the prior year, while India reported the biggest fall of minus 23.5pc among G20 countries. The US economy contracted by 9.1pc, EU by 13.9pc, the UK by 21.7, Canada by 13pc, Turkey 9.0pc and Japan 10.1pc in Q2 from the prior year quarter. GDP of the G20 block degrew by 9.1pc in Q2.