UN lifts 2021 economic growth forecast on COVID recovery hopes

Policymakers seem determined to contain COVID-19 and speed up relief measures but calls for a return to austerity measures to head off inflation are already growing, the UN’s trade and development agency says.

The United Nations has raised its forecast for global economic growth in 2021 as governments step up COVID-19 vaccination programmes and keep fiscal and monetary stimulus measures in place following the loss of more than a quarter of a billion jobs due to the pandemic. But the UN’s trade and development agency says in its latest report published on Thursday that the recovery from the steepest-ever annual drop in global economic output is likely to be uneven and unpredictable, with people’s incomes unlikely to return to pre-pandemic levels for years. Meanwhile, the pressure on policymakers to pull back their extraordinarily large stimulus measures even before they have succeeded in returning employment to pre-COVID levels is beginning to mount as expectations of accelerating inflation rise.