Has the world recovered from the global crisis

World economyHow the countries are recovering from the corona crisis

“We probably still have six to nine or twelve months ahead of us,” says Laurence Boone, chief economist at the industrialized countries organization. She means contact restrictions of varying degrees of severity with which the world is trying to free itself from the grip of the coronavirus. Accordingly, she sees a number of uncertainties.

One thing is certain: the corona pandemic has dealt a severe blow to the global economy. It hit individual regions and countries differently. And as the world gradually pushes back the virus, the recovery that begins will be highly uneven. Some advance as winners, others will only overcome the crisis later.

In 2020, the global economy suffered the worst slump since the end of World War II, with millions of people losing their jobs or taking short-time work. Above all, the governments of the more mature economies are trying to limit the damage with aid programs worth billions for the economy and its citizens. Poorer countries and some emerging economies cannot go into debt to the same extent.

According to the OECD, the global economy will make up for the decline of 4.25 percent by the same amount in 2021 and then grow by 3.75 percent in 2022. Global GDP will therefore have reached pre-crisis levels again by the end of 2021. "The recovery would be stronger if the vaccines were introduced quickly, which increases confidence and reduces uncertainty."

Asia at an advantage

But the dynamics are unevenly distributed. Many of the richest nations in the world will not have fully recovered until 2022 at the earliest. It also depends on how quickly the pandemic can be slowed down. In the race against potentially more contagious virus mutations and depending on the pace of vaccine production, even industrialized nations may not achieve the herd immunity target by the end of 2021. Developing countries will not be able to prevent the virus from spreading further.

Long-term permanent damage

Despite the recovery this year, the crisis is expected to make many economies five percent smaller by 2022. “The advanced and emerging economies could have lost the equivalent of four to five years of growth in real per capita income in the median by 2022,” writes the OECD in its Economic Outlook 2021. More than a temporary weakness. In China, Korea, Japan and some northern European economies, however, the risk of such long-term costs is considered to be relatively low.

These are the countries that will recover quickly or slowly from the OECD perspective:

 

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# 1 China

According to the OECD forecast, China's economy is expected to grow by eight percent in 2021, followed by 4.9 percent in 2022. The crash in the first quarter was followed by a steep increase in GDP and then stabilization thanks to government investments in infrastructure and strong export demand for household goods or medical products Goods. Exports to the US defied the crisis and trade war - they are at record levels. With the free trade zone in the Pacific and the Silk Road Initiative, Beijing is expanding its influence and at the same time structurally reducing the dependence of its economy on technologies such as semiconductors. The People's Republic could overtake the USA as the world's largest economy within five years, twice as fast as previously expected. Private consumption remains the weak point.

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# 2 South Korea

Two years after the start of the pandemic, Korea's economy will have overcome the crisis with a plus of 1.63 percent. Consistent measures to contain infections have limited the gross domestic product minus to just over one percent - the least damage among all OECD countries. The recovery is being driven by private consumption and government support for households as well as by export growth in electronics (especially semiconductors). With significant investments in digitization and the green economy, growth of three percent each is expected in 2021 and 2022.

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