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2021/01/12 / Erste Group Research

2021 – Year of Economic Recovery

In our opinion three major drivers will propel an expansion of the global economy in 2021. Thanks to the deployment of the first effective vaccines against COVID-19, currently necessary restriction measures should be gradually eased in 2021. In addition the global economy will receive a tailwind in 2021 from the ongoing expansionary monetary policy bias of the world's major central banks. Beyond this, major economic areas will be supported by generous fiscal stimulus packages.

The EU recovery plan increases the pressure to reform. In order to be able to draw down funds provided under the EU recovery plan, all EU countries must submit reform plans to the Commission by April 2021. This will be a delicate undertaking for Italy and Spain, as the Commission will insist on the implementation of hitherto delayed reforms.

The green transformation of the economy is gaining momentum. Germany and France have to significantly boost their efforts in order to meet their greenhouse gas emissions targets by 2030. This implies substantial funding requirements, which the EU recovery plan takes into account. China is following Europe's lead and has implemented a groundbreaking shift in 2020, aiming to become a carbon neutral economy by 2060.

We expect growth of 4.2% in 2021, after a contraction of 3.5% last year. This rapid recovery is not least due to high public spending.

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General information

AuthorErste Group Research
Product nameEconomic Outlook Eurozone, USA
Topic in focusMacro/ Fixed income
Economy in focusEurozone, United States
Currency in focusEuro, US Dollar
Sector in focus-


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