World economy

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The COVID-19 viral pandemic is an unprecedented global phenomenon that is also a highly personal experience with wide-ranging effects. On September 20, 2021, U.S. viral deaths surpassed the 675,446 total from the 1918 Spanish flu, the previously worst U.S. pandemicrelated death total on record.
The pandemic has disrupted lives across all countries and communities and negatively affected global economic growth in 2020 beyond anything experienced in nearly a century. Estimates indicate the virus reduced global economic growth in 2020 to an annualized rate of around -3.2%, with a recovery of 5.9% projected for 2021. Global trade is estimated to have fallen by 5.3% in 2020, but is projected to grow by 8.0% in 2021.
According to a consensus of forecasts, the economic downturn in 2020 was not as negative as initially estimated, due in part to the fiscal and monetary policies governments adopted in 2020. In most countries, economic growth fell sharply in the second quarter of 2020, rebounded quickly in the third quarter, and has been mostly positive since. Although lessening, the total global economic effects continue to mount. In particular, the prolonged nature of the health crisis is affecting the global economy beyond traditional measures with potentially long-lasting and farreaching repercussions.
Economic forecasts reflect continuing risks to a sustained global recovery posed by a resurgence of infectious cases and potential inflationary pressures associated with pent-up consumer demand fueled by an increase in personal savings. On the supply side, shortages reflect lingering disruptions to labor markets, production and supply chain bottlenecks, disruptions in global energy markets, and shipping and transportation constraints that are adding to inflationary pressures. As some developed economies start recovering, central banks and national governments are weighing the impact and timing of tapering off monetary and fiscal support as a result of concerns over potential inflationary pressures against the prospect of slowing the pace of the recovery. These concerns are compounded by the emergence of new disease variants and rolling pandemic hotspots that challenge national efforts to contain infections and fully restore economic activities.
Major advanced economies, comprising 60% of global economic activity, are projected to operate below their potential output level through at least 2024, which indicates lower national and individual economic welfare relative to pre-pandemic levels. Compared with the synchronized nature of the global economic slowdown in the first half of 2020, the global economy has shown signs of a two-track recovery that began in the third quarter of 2020 and has been marked by a nascent recovery in developed economies where rates of vaccinations are high, but a slower pace of growth in developing economies where vaccination rates are low. As a whole, developed economies have made strides in vaccinating growing shares of their populations, raising prospects of a sustained economic recovery in late 2021 and into 2022 and, in turn, a recovery in the broader global economy. However, new variants of the COVID-19 virus and a surge in diagnosed cases in large developing economies and resistance to vaccinations among some populations in developed economies raise questions about the speed and strength of an economic recovery over the near term. A resurgence of infectious cases in Europe, Latin America, Russia, the United States, Japan, Brazil, India, and across much of Africa renewed calls for lockdowns and curfews and threatened to weaken or delay a potential sustained economic recovery into late 2021.