Global Economic Outlook Inflation prompts policy normalisation

ABSTRACT

Despite forecasting GDP growth in 2021 and 2022 a bit weaker than we previously thought, our forecast for the world economy is still for an expansion of 5.7 per cent in 2021 and 4.2 in 2022 (Figure 1), marginally lower than our Autumn Outlook. Growth of the world economy is set to slow down further, to 3.5 per cent in 2023, with risks skewed to the downside due to the virus and supply chain disruptions. We estimate that the pandemic will result in the level of global GDP being about 3 per cent of GDP lower in 2025 than our pre-pandemic expectation, with the cumulative loss up to 2025 amounting to around $28 trillion.