Coronavirus: World Bank cuts global growth estimate, but sees big Chinese recovery

The World Bank on Tuesday downgraded its outlook for the global economy, and warned the situation could deteriorate if Covid-19 infections accelerate or the vaccine roll-out is delayed.

The coronavirus pandemic also has worsened the risks surrounding the rising debt load in developing nations, and it will take a global effort to avoid a new crisis in those economies, the bank cautioned.

After shrinking 4.3 per cent in 2020, the world economy is projected to grow by 4.0 per cent this year, two-tenths lower than previously forecast, as more than half of countries were downgraded in the semi-annual Global Economic Prospects report.

China was a bright spot with a surprisingly fast recovery in 2020, but advanced countries which did better last year will fare worse in 2021, the bank said.

The report warns the outlook remains “highly uncertain”, and GDP growth could be as low as 1.6 per cent this year if the downside risks materialise.