Because of the pandemic, projecting what the world economy is going to look like is harder than ever. However, even now we are finally able to see new trends emerge which presupposes that the world economy is on the road to recovery. It is projected that the world economy will continue to grow, but the recovery process will be uneven. What it means is that some parts of the world are going to see positive changes faster than others. Here are the most important aspects to pay attention to.
Growing at record speed
Since the world started to return to the new normal slowly, growth of the world economy is more than expected. It looks like the global economy is expected to expand by 5% approximately. However, there are a few aspects to consider. One of the most significant ones is a successful distribution of the vaccines around the world and vaccination rates in different countries. It will be impossible to conduct business as usual when half of the world remains unvaccinated. The possible introduction of a series of lockdowns is another aspect to take into account. If we manage to avoid them the economy will continue to grow.
No matter how positive these predictions sound, it is vital to keep in mind that only some parts of the world will see economic growth at record speed. It is expected that the global economy will be back to its pre-pandemic level by early 2022. Yet, this will most likely happen only to the most advanced economies of such countries as the United Kingdom, Japan, France or Germany. Apart from that, governments of most countries are going to shift to fighting high unemployment rates caused by the pandemic. As a result, there is a possibility that more workplaces will be created which will have a positive impact on the growth of the global economy.
Another vital aspect to mention is the push for green infrastructure which we are going to see in the near future. Fighting climate change has become the main priority for the US, EU and China which means that we are going to see new projects in this field. In other words, the transition to greener infrastructure will most likely accelate in 2022.
Predictions
Speaking about predictions for the near future, there is quite a lot to mention. If you are currently covering this topic for a school project and already feel overwhelmed, don’t forget that you can always ask for assistance from an essay writing service where an economics expert will share their experience in this area. There’s a lot of material to cover. For this reason, having a trustworthy American college paper writing service on hand, the team of which knows a thing or two about the future of the world economy will definitely come in handy. So, the first thing to highlight is that oil prices are likely to remain below $60bbl at first. However, certain growth is expected by the end of 2021 and at the beginning of 2022. Solar PV capacity will continue to grow and is projected to reach its maximum potential in the next few years. If the trend continues, solar PV capacity will surpass natural gas by the end of 2023. Another important factor to mention in regards to green infrastructure is that it is also expected to see the global green bond insurance to top $500billion. Curbing carbon emissions has become one of the leading strategies around the world, so it is not surprising that both governments and businesses are willing to invest in this field.
The monetary policy strategies are under review both by the US Federal Reserve and the European Central Bank. What it means is that changes are going to be introduced really soon. In fact, the US Federal Reserve has already shifted to an average inflation targeting regime as they want to stay focused on employment levels more. What it all boils down to is that the target rate will remain lower for a much longer time. Speaking about the ECB, they are expected to announce the results of their review in the last quarter of 2021. Yet, what is already clear now is that the European Central Bank will most likely follow the example of the US Federal Reserve in regards to the monetary policy strategy.
