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Our recently published Global Economic Outlook included an upward revision to our projections for global GDP growth this year and next. Across countries, however, there is considerable divergence in the projected dates at which they will recover their pre-pandemic GDP levels. Output has already recovered its level from before the pandemic struck in China and the US. But the US is the only one of the G7 economies to have achieved that so far.
The economic downturn in the wake of Covid-19 means forecasters must navigate a totally different economic landscape. But by organising thoughts about possible future scenarios, forecasts can help governments identify policies to bridge from today to a new future
Now that we are well into in the last year of this decade, it seems like a good moment to take stock of what has happened to global economic growth in the second decade of this century. Given all the change this decade has seen, it comes as a surprise to find that the average annual rate of global economic growth over the decade has been similar to that of the previous decade. And it may be even more of a surprise to learn that the year-on-year variation in annual global GDP growth has been very small.
During the time of uncertainty before a coalition of populist parties formed a government in Italy at the end of May, there was a rapid sell-off of Italian bonds, with the yield on the ten-year Italian government bond hitting 3.2 per cent in early June. In the same period, the Italian benchmark FTSE MIB index declined by 13 per cent compared to a month earlier.