World economy in the year 2021: which countries will win, who will lose The corona virus has ravaged the world’s economy. The world economy has witnessed the fastest decline since the second world war in the year 2020. Millions of people have either lost their jobs or lost their earnings. Governments are investing billions of dollars to stop the damage to economies. However, the economic recovery in 2021 is still very uncertain. According to an initial estimate, China’s economy has started to grow strongly again.
But for many rich countries of the world, there may be difficulties in getting complete recovery by the year 2022. Non-parity is also increasing on a large scale. The net worth of 651 American billionaires has increased by 30 percent to reach $ 4 trillion.
On the other hand, 250 million people in developing countries may have to face extreme poverty and perhaps half of the world’s workforce has lost their means of livelihood. The pace of stopping the epidemic is going to have a profound effect on the performance of economies across the world.
There is no guarantee of a quick win between the new strain of corona virus and the vaccine race. Even though the rich countries have acquired most of the available vaccines, it will probably not be possible for them to reach enough people for herd immunity by the end of the year 2021.
In developing countries, vaccine supply is usually low, so the virus is expected to spread rapidly in these places.
Economy
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Winning countries
In this case, China and South Korea can be among the big winning countries. These are the countries which have been successful in suppressing Kovid-19 in the beginning. China’s economy can grow at 8 percent in 2021.
In this sense, China’s growth rate may be more than double that of the world’s most successful western countries before the epidemic. China’s economy largely dependent on exports has benefited from the lockdown in western countries. Demand for services like entertainment and travel may have declined in western countries.
However, their demand for household goods and medical supplies has increased. Also, despite the high tariff imposed by the Trump administration, exports from China to the US have reached record levels. China is also increasing its economic influence throughout Asia.
China is dominating a new free trade zone in the Pacific and heavy infrastructure projects around its trade routes from Europe to Africa. China is also investing in advanced technologies to reduce its dependence on the supply chains of Western countries on components such as semiconductors. In the next five years, China will become the world’s largest economy and it will leave America behind in this matter. It will become the largest economy at twice the speed of earlier estimates.
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Economy
Losing countries
The outlook for the rich countries of America, Britain and Continental Europe is not very good. After a modest recovery in the summer of 2020, the wheels of the economies of these countries came to a standstill again. The second wave of corona and lockdown have been the reasons for this.
For example, the epidemic has had a profound effect on jobs and growth in America. Because of this, business and consumer confidence came down. Despite the expectation of some recovery next year, these economies are expected to shrink by 5 per cent in 2022 against normal conditions.
However, it is feared that in 2021, developing countries will suffer the most. These countries do not even have the financial resources to buy adequate vaccines and their public health system is not such that they can treat a large number of infected people.
Also, these countries cannot give huge government subsidies so that large scale unemployment can be stopped on the lines of Europe and America.
Due to the slowdown in the western countries, the demand for raw materials of these developing countries is not over and due to the lack of any help from the rich countries in making these loans, these countries are not even able to increase the lockdown further. Even fast growing countries like Brazil, India and South Africa will not be easy to get out of these conditions.
For example, South Africa is not eligible for the Kovax vaccine given to extremely poor countries, but it is not in a position to purchase a vaccine from the commercial market. This is when it is making these vaccines for western pharma companies on its own. In the past, there was a fast growing middle class in these countries. Now the working class poor in lakhs and crores have been forced to return to their villages and urban slums as they have no work to do. This is causing immense poverty and hunger.
New division,
The economic impact of the epidemic is seen in a very different way on society. People who work full-time and have a hefty salary, have been successful in saving fat because their expenses have come down.
Extremely rich people, especially in the US, have gained huge benefits in the aftermath of the stock market that fell during the epidemic. This has happened especially with Amazon, Netflix and Zoom and this trend can continue even further.
The big question for the economy is whether the people who get secure jobs and big wages in the coming year will return to their previous patterns of spending. Or they will keep their savings in view of future uncertainty.
Due to the slowdown in the western countries, the demand for raw materials of these developing countries is not over and due to the lack of any help from the rich countries in making these loans, these countries are not even able to increase the lockdown further. Even fast growing countries like Brazil, India and South Africa will not be easy to get out of these conditions.
For example, South Africa is not eligible for the Kovax vaccine given to extremely poor countries, but it is not in a position to purchase a vaccine from the commercial market. This is when it is making these vaccines for western pharma companies on its own.
In the past, there was a fast growing middle class in these countries. Now the working class poor in lakhs and crores have been forced to return to their villages and urban slums as they have no work to do. This is causing immense poverty and hunger. The economic impact of the epidemic is seen in a very different way on society. People who work full-time and have a hefty salary, have been successful in saving fat because their expenses have come down.
Extremely rich people, especially in the US, have gained huge benefits in the aftermath of the stock market that fell during the epidemic. This has happened especially with Amazon, Netflix and Zoom and this trend can continue even further.
The big question for the economy is whether the people who get secure jobs and big wages in the coming year will return to their previous patterns of spending. Or they will keep their savings in view of future uncertainty.