Thanks to a strong rebound from the Covid-19 pandemic, China will be the only country to experience growth in 2020 and is set to grow by 8.2% in 2021
By Patrick Body
After bouncing back strongly from the Covid-19 pandemic, China is expected to experience GDP growth of 8.2% in 2021. Second only to the 8.8% projected growth for India, China’s numbers are down a full percentage point from an International Monetary Fund (IMF) April estimate, however, the country will still account for more than a quarter of global growth next year.
Despite the fact that tight monetary policy may restrain China’s GDP growth in 2021 by slowing infrastructure growth and property investment, the country is still expected to account for 26.8% of worldwide growth by the end of the year. This proportion is expected to rise as far as 27.7% in 2025, more than 17 percentage points higher than the US share of expected global output.
Alongside China and the US, India, Germany and Indonesia make up the rest of the top five predicted growth engines of 2021, contributing to expected global growth of 5.2%.
China is leading the world out of the global pandemic thanks to strong government intervention enabling a swift return to near normality. This quick rebound means that it is the only economy forecast to grow in 2020. With a predicted expansion of 1.9% this year, the country is in a position to cement itself at the top of world-wide growth expectations.
Even with the promising outlook 2020 has not been a smooth ride, even for China, as it experienced a shrinking in GDP of 6.8% year-on-year in the first quarter. Fixed-asset investment, exports and retail sales all fell by over 10% in this period, but have reverted to growth over the last few months amid the post-Covid recovery.
Within the country, businesses and consumers are becoming more positive about the economic outlook after the pandemic. Confidence in investing is rising and this, alongside consumption are expected to be the main drivers of economic growth in 2021. Given the condition of the rest of the world, China is in a very good position to continue driving global growth for years to come.