August 12, 2021

The Forward View – Global: August 2021

Differing vaccination rates are driving a divide between economic groups.


  • There are growing signs of a divide between advanced economies and emerging markets in indicators such as equity indices, purchasing manager indices and mobility data. In part this appears related to generally higher COVID-19 vaccination rates in advanced economies –which are allowing a greater degree of openness despite the spread of variants such as Delta –while various EMs are forced to impose restrictions.
  • There are concerns around China’s economic growth, following a Delta variant COVID-19 outbreak that started in mid-July. Chinese authorities have introduced mass testing and travel restrictions, along with localised closures of events and businesses, but it will be critical to see if China can control the outbreak without harsh countermeasures that would slow economic activity. This outbreak could further disrupt global supply chains –where shortages and rising commodity prices are flowing through into strong producer price increases.
  • Our global forecast for 2021 is marginally weaker this month –with growth of 6.2% –compared with 6.3% previously. This slightly weaker rate of growth reflects downgrades to our forecasts for the United States, Japan, the United Kingdom and Canada, marginally offset by an upgrade to our forecasts for the Euro-zone. Our global forecasts for 2022 and 2023 are unchanged (at 4.6% and 3.5% respectively). Risk around our India and China forecasts appears weighted to the downside –particularly if China’s measures to limit the spread of its current COVID-19 outbreak leads to a significant slowing in economic activity.

For further details, please see The Forward View – Global (August 2021)