World Bank Projects 5.6% Global Economic Growth This Year... Concerns Over Country-Level Disparities
Revised Upward by 1.5%P from January
Concerns Over Recovery Gap Between Advanced and Developing Countries Due to Uneven Vaccine Distribution
[Asia Economy New York=Correspondent Baek Jong-min, Reporter Kim Hyun-jung] The World Bank (WB) projected the global economic growth rate for this year at 5.6%, the highest since 1973, while expressing concerns about growth disparities among countries. At the end of this month, the Korean government is expected to announce its economic policy direction for the second half of the year aimed at minimizing polarization, along with a domestic gross domestic product (GDP) growth forecast exceeding 4% for this year.
On the 8th (local time), the WB presented a global GDP growth forecast of 5.6% for this year in its semiannual Global Economic Prospects report. This is 1.5 percentage points higher than the 4.1% forecast made in January. By country (2021), the WB expects growth of 6.8% for the United States, 8.5% for China, 4.2% for the Eurozone, and 2.9% for Japan.
The WB particularly expressed concerns about the recovery speed gap between advanced and developing countries. While 90% of advanced countries, including the United States, are expected to recover to pre-pandemic levels by 2022, only one-third of developing countries are projected to achieve such recovery. The WB attributes this to uneven vaccine distribution. It also pointed out that if inflation is not properly managed, central banks in emerging countries may be forced to implement tighter monetary policies beyond appropriate levels to support economic recovery.
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Considering these global economic forecasts, the Korean government will release its economic policy direction for the second half of the year, including measures to address polarization during the recovery period. Alongside this, it will announce a GDP growth forecast in the 4% range for this year. A Ministry of Economy and Finance official explained, "We will calculate the growth forecast based on internal analysis and add 0.1 percentage points to reflect the government's commitment to recovery before announcing the figure." The Bank of Korea recently forecasted a related growth rate of 4.0%, stating that if the government's economic stimulus measures and rapid vaccine rollout align, growth in the high 4% range is also possible.
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