Reuters: // realtime/verb = Open / url = cpurl: //apps.cp./Apps/lteo? profileID = g20gdp Comparative GDP survey data
Reuters: // realtime/verb = Open / url = cpurl: //apps.cp./Apps/econ-polls? RIC = XGGRTHAP Global Growth Survey Data
https://tmsnrt.rs/3eXOMtc Reuters poll graphic on revisions to the 2021 global GDP forecast
https://tmsnrt.rs/3zwztPS Reuters poll graphic on revisions to the 2022 global GDP forecast
By Shruti Sarkar
Bengaluru, July 27 (Reuters) – The outlook for global economic growth remains powerful for this year and next, although a big majority of economists in Reuters polls have warned that unused coronavirus variables pose the biggest risk to those expectations.
A global survey of nearly 500 economists conducted this month also concluded that the recent rising inflation in major economies around the world would be temporary.
The global economy is now expected to expand 6.0% this year, its fastest rate in nearly half a century, followed by a still-powerful 4.5% rate in 2022. Both are marginal increases from the April survey.
More than half of the 48 economies surveyed have upgraded slightly in each quarter for both years.
But the sudden rise in the latest version of the virus, which kept the belated Tokyo 2020 Olympics an event without spectators, is a reminder that vaccines may have improved but that the epidemic has not gone away.
said Ethan Harris, global economist at Bank of America Securities.
“Overall, we see rising delta as a temperate headwind of global growth, but as unused information comes in, we can be persuaded otherwise.”
Financial markets are on alert ahead of this week’s US Federal Reserve meeting, as policymakers grapple with increased coronavirus infections and a disrupted global supply chain that could lead to more price pressures.
As for the risks to the global economy, nearly 80% of economists, or 160 of the 202 who answered an additional interrogate, said the largest spread of novel coronavirus variants.
More than 70% of economists, or 152 out of 209, said the current upward trend in global inflation has been fleeting.
But respondents raised their inflation forecasts for 2021 for 35 of the 48 economies surveyed and 31 of them for next year. At the alike time, there were 29 economies updated for growth for this year and 26 for the following period, indicating some price stability.
“What makes market pricing in the US more informative is that they clearly categorize the (Fed) policy willingness to view rising inflation as credible. This is at a time when US inflation has caught the upside again, and is leading to a wave of rising inflation,” said Christian Keeler. , Head of Economics Research at Barclays: “Upside surprises across DMs and some emerging markets.”
While economists had expected the Fed to end its bond-buying program by the end of 2022, with few analysts now expecting a rate hike beforetime next year, the Bank of Japan and the Bank of England were expected to preserve policy unchanged until the end of next year. . ECILT / USECILT / GBECILT / JP
Meanwhile, the European Central Bank will start reducing its purchases of pandemic-related assets sometime following its September meeting and quit buying them by the end of March. ECILT / EU
While advanced economies have dealt with the pandemic with massive vaccination campaigns, emerging economies are still dealing with dose shortages.
“Vaccination remains the key,” noted Vishwanath Tirupator, a strategist at Morgan Stanley. “Risks remain lofty in countries with low vaccine prevalence, particularly in South and Southeast Asia, Africa and other emerging market economies.”
In China, the world’s second-largest economy, economic growth is likely to slow sharply to 8.1% in the second quarter from a record lofty of 18.3% in the January-March period as the outbreak of the novel coronavirus, COVID-19, hit consumer spending.
Economists have expected Australia’s resource-intensive economy to be hit this quarter by renewed lockdown restrictions and India’s economic recovery is also expected to lose momentum. ECILT / AUECILT / in
Brazil’s economy was expected to extend its “unemployment recovery” following rising inflation this year, while Mexico’s growth outlook looked brighter. ECILT / LTAM
How labor markets effectively recover or adjust once government support schemes are over will also be key in the coming months for both growth and inflation expectations.
Unemployment rates were widely expected to remain overhead pre-COVID-19 levels in the coming years, including in the United States where the pace of employment has been very powerful in recent months.
According to Michael Ivry, global strategist at Rabobank, “a weak and fragmented global labor market presents a vast structural headwind to sustained wage inflation, and thus to sustainable inflation in general.”
Graph of a Reuters poll on global economic growth and inflation expectations: https://tmsnrt.rs/3iRMFYS
Reuters World Economic Outlook poll graphic: https://tmsnrt.rs/3eV9wlg
(Reporting by Shruti Sarkar; Indradeep Ghosh analysis; Poll and additional reporting by Reuters polling team in Bengaluru and offices in Shanghai, Tokyo, London, Istanbul, Johannesburg and Buenos Aires; Editing by Ross Finley and Steve Orlovsky)
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