2021 Economic Forecast Uncertainty Amplified by Global Pandemic

Abstract

The global economic outlook for 2021 is highly uncertain. There are several sources for this uncertainty, but chief among them is the evolution of the COVID-19 pandemic and progress on vaccine rollouts across countries. The ultimate effectiveness of novel or aggressive fiscal and monetary stimulus measures are another source of uncertainty, as is the asynchronous nature of the global recovery—strong growth is projected in many Asian economies in 2021 while Latin American and European economies are projected to lag. The result is a very dispersed range of near-term economic forecasts and inflation expectations that could produce pronounced volatility in interest rates or financial asset prices as the year progresses.

Authors

Arthur Ribeiro da Silva