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Section 2
Market and economic overview – 2021 Key themes: Global economic growth strongly rebounded • Supply-side constraints and fiscal stimulus drove inflation higher • Global financial markets delivered another year of double-digit returns • Local asset classes were all positive Global economic growth strongly rebounded in 2021 Following a contraction of 3.1% in 2020 – the worst global recession since the Great Depression – global economic growth strongly rebounded to 5.9% in 2021, supported by robust fiscal and monetary stimulus rolled out by several countries.
Furthermore, positive coronavirus vaccine developments also led to further easing of the lockdown restrictions as countries rolled out inoculations. This rebound was driven by both advanced economies (AEs) and emerging and developing economies (EMDEs) that recovered to 5.2% and 6.4% respectively from contractions of 4.5% and 2.1% in the prior year.
Table 1: Consensus forecasts on economic growth and inflation from selected regions Economic growth
Inflation
2019
2020
2021
20221
2019
2020
2021
20221
2.8
-3.1
5.9
4.4
3.5
3.2
4.3
3.8
2
1.7
-4.5
5.0
3.9
1.4
0.7
2.8
2.3
US
2.3
-3.4
5.6
4.0
1.8
1.2
4.7
4.4
Euro area
1.5
-6.3
5.2
3.9
1.2
0.3
2.5
1.5
UK
2.3
-3.4
7.2
4.7
1.8
0.9
2.5
4.0
Global AEs
EMDEs3
3.7
-2.1
6.5
4.8
5.1
5.1
5.5
4.9
Brazil
1.4
-4.1
4.7
0.3
3.7
3.2
8.3
6.0
Russia
2.0
-3
4.5
2.8
4.5
3.4
6.7
6.1
India
4.0
-7.3
9.0
9.0
4.8
6.2
5.6
4.9
China
6.0
2.3
8.1
4.8
2.9
2.4
1.1
2.2
South Africa
0.1
-6.4
4.6
1.9
4.1
3.3
4.5
4.8
Sources: Bloomberg, IMF and Alexforbes
1 Forecast 2 Advanced economies 3 Emerging markets and developing economies
