China Seen to Lead Global Recovery

In its recent economic outlook, Organization for Economic Cooperation and Development forecast a global economic contraction of 4.2 percent in 2020, an improvement from its September estimate of 4.5 percent. Rapid progresse on COVID-19 vaccine and continued public sector interventions to mitigate the economic impact of the pandemic have boosted confidence. China, the only major economy expected to achieve GDP growth in 2020, is expected to lead the global recovery by accounting for one-third of global economic growth in 2021.

Key Economic Indicators

China’s consumer price index (CPI) dropped for the first time in 11 years, with a decrease of 0.5 percent year-on-year (y-o-y) in November 2020. This decrease occurred due to a decline in food prices caused by lower pork and egg prices. The producer price index (PPI) dropped by 1.5 percent y-o-y in November, a lower drop compared to 2.1 percent in October. Improving market demand with rising industrial prices led to this slight drop.

Strong PMI Growth in China

China’s Producer’s Manufacturing

Index (PMI) reached 52.1 in November 2020, the highest since September 2017, reflecting the return of industrial activity to pre-epidemic levels. A rise in exports to Europe and the U.S. due to holiday demands and the reopening of schools and businesses are some of the main reasons for this spur. However, since many countries are still under lockdown and bracing for a second wave by closing borders once again, trade and hence production is likely to be impacted.

Elections Held in Africa

Madagascar, Togo and the Democratic Republic of the Congo (DRC) held elections in the final month of 2020, rounding off a tumultuous year of democratic processes around the globe. Madagascar held its presidential second round elections on December 19. Togo held legislative elections and a constitutional referendum, amidst the ongoing political crisis caused by rallies against the administration of President Faure Gnassingbe. The DRC’S November delayed elections were moved to December, with outgoing President Joseph Kabila stepping down after almost two decades as president. CA