Domestic economy tipped to grow by 7.9%

CHINA’S economy is expected to expand by 7.9 percent this year after growing by 2 percent in 2020, while the global economy will experience a subdued recovery this year from the devastating pandemic, the World Bank predicted on Tuesday.

In its new Global Economic Outlook, the World Bank forecast 4 percent growth this year following a 4.3 percent decline in 2020, the biggest plunge in global output since a contraction of 9.8 percent in 1945 as nations demobilized at the end of World War II.

By comparison, the global recession triggered by the Great

Depression of the 1930s saw growth shrink by 4.8 percent on average from 1930 through 1932.

The 2008 financial crisis triggered a 1.8 percent drop in global output in 2009.

“If history is any guide, the global economy is heading for a decade of growth disappointments unless policy-makers put in place comprehensive reforms,” the bank warned, citing the global pandemic layered over economic trends already in play.

“While the global economy appears to have entered a subdued recovery, policy- makers face formidable challenges in public health, debt management, budget policies, central banking and structural reforms,” said World Bank President David Malpass.

The bank said global growth will be aided by a recovery this year to GDP growth of 3.5 percent in the United States and an even bigger 7.9 percent rebound in China, the world’s two biggest economies.

Because of the uncertainty caused by the current resurgence in virus cases and initial problems in distributing vaccines, the World Bank cautioned that its forecast is highly uncertain.

Under a scenario where virus cases continue to rise and the rollout of the vaccine does not accelerate, global growth could be reduced to a meager 1.6 percent this year.

The new report boosted global growth for 2020 by 0.9 percentage-points from its June forecast, reflecting in part a better-thanexpected performance in China and advanced economies. But the forecast trimmed the outlook for 2021 by 0.2 percentage points.

To combat the sharp downturn, the World Bank has made US$160 billion available to help more than 100 countries protect the poor, support businesses and bolster the recovery.