World Bank Boosts Growth Forecasts As U.S. Stimulus, Vaccines Stoke Demand

• The World Bank on Tuesday raised its global growth forecast to 5.6% for 2021, marking the strongest recovery from a recession in 80 years. This growth will be driven by the U.S. stimulus spending and faster growth in China. However, overall global growth will held back by "highly unequal" access to COVID-19 vaccines. 
• The development lender's latest Global Economic Prospects report showed a 1.5-percentage-point increase from forecasts made in January, before the Biden administration took office and enacted a $1.9 trillion U.S. COVID-19 aid package. 
• Since then, vaccines have become much more widely distributed in the United States and some other wealthy countries, boosting their output, as forecasts lag for emerging market and low-income countries. 
• "This recovery is uneven and largely reflects sharp rebounds in some major economies -- most notably the United States, owing to substantial fiscal support -- amid highly unequal vaccine access," the World Bank said in the report. Many emerging market and developing economies were seeing elevated COVID-19 caseloads, obstacles to vaccination and withdrawal of support, the bank said. 
• If vaccine distribution to developing countries can be accelerated, World Bank economist Ayhan Kose said that 2022 global GDP growth, currently forecast at 4.3%, could increase substantially to around 5%.

(Source: Reuters)