(Bloomberg) -- The global economy is expected to undergo its fastest recovery in almost five decades this year, but deepening inequities between advanced and developing countries threaten to undermine this, the United Nations warned.
Following last year’s 3.5% contraction, world gross domestic product will likely surge 5.3% in 2021 due to “radical” policy interventions and a successful, if incomplete, vaccine rollout in advanced economies, the UN Conference on Trade and Development said in a report Wednesday.
Expansion may slow to 3.6% next year, taking the estimated cumulative income loss since 2020 to $13 trillion, it said.
Many countries in the southern hemisphere have been hit especially hard during the pandemic, and fiscal constraints, a lack of monetary autonomy and poor access to Covid-19 vaccines could escalate economic stress on developing nations, according to the report.
“These widening gaps, both domestic and international, are a reminder that underlying conditions, if left in place, will make resilience and growth luxuries enjoyed by fewer and fewer privileged people,” Unctad Secretary-General Rebeca Grynspan said. “Without bolder policies that reflect reinvigorated multilateralism, the post-pandemic recovery will lack equity and fail to meet the challenges of our time.”
Unctad proposed international support for deploying vaccines in developing countries, and greater policy coordination across systemically important countries as ways to boost expansion. Weak policy, or backsliding, could impede growth further.
“Even barring significant setbacks, global output will only resume its 2016-19 trend by 2030,” Unctad said.
Among the report’s other highlights:
- U.S. economic output is forecast to grow by 5.7% in 2021 and 3% in 2022
- China’s GDP is predicted to jump 8.3% this year and 5.7% next
- The European Union’s recovery will amount to 4% growth in 2021 and 3.3% next year
- India is primed for a 7.2% increase in GDP this year followed by a 6.7% expansion in 2022
©2021 Bloomberg L.P.