Global Economy To Rebound In 2021 With APAC To Lead Recovery

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Global Economy To Rebound In 2021 With APAC To Lead Recovery

Global economy to rebound in 2021 with APAC to lead recovery, says GlobalData

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APAC Set To Become The Fastest Growing Region

The Asia Pacific (APAC) region is set to become the fastest growing in terms of GDP growth in the world followed by the Americas, Europe and the Middle East & Africa (MEA) in 2021, says GlobalData, a leading data and analytics company. Economic factors in this ranking that are aiding global regional recovery include the rollout of vaccines, revival of global demand, effectiveness of government spending, and oil prices gaining traction.  Particular, the APAC region is seeing fewer lockdown restrictions, a rebound in domestic consumption and an uptick in export demand.

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Gargi Rao, Economic Research Analyst at GlobalData, says: “The collapse of oil prices and increasing COVID-19 cases has hurt all global economies. Europe witnessed a steep contraction in real GDP growth by 7.16% in 2020 followed by the MEA region (-5.23%), and the Americas (-5.16%). The APAC region saw a slower contraction of -2.12% last year, with China witnessing positive growth amid the pandemic.”

Timely implementation of fiscal policies, along with the procurement and distribution of vaccines, are expected to be the main drivers of growth recovery in 2021. The Americas region is expected to rebound with 4.7% growth backed by rising oil prices, whereas Europe and the MEA will grow by 4.46% and 3.66%, respectively, during the year.

Rao noted: “The Purchasing Managers’ Index (PMI) for manufacturing in the APAC region has witnessed an uptick since the closing months of 2020, which indicates a sharp recovery in business activities and production. The expected progressive rollout of COVID-19 vaccines will help countries contain the spread of the disease and economic activities to rebound in 2021. In addition, the rebound in growth of major APAC countries such as India and China will create further opportunities for trade and spur growth.”

APAC

Growth In Manufacturing And The Service Sector

Growth in manufacturing and an uptick in the service sector will also spur growth in the Americas region, with an increase expected in business activities and online retail trade. The monetary authorities in Latin American countries have maintained steady benchmark rates to ease liquidity constraints, while the huge fiscal stimulus by the US Government will have favourable spill over effects to the region in 2021.

Ms Rao continues: “Growth in Europe is expected to be bolstered by the NextGenerationEU framework and political agreements on recovery and resilience funding. Meanwhile, the MEA and Americas regions will be benefitted by the rise in crude oil prices bringing in more demand opportunities and leading to higher growth rates in the coming years. The recent signing of RCEP agreement will boost trade in the APAC region by lowering tariffs and expanding intraregional trade in services and e-commerce.

“The outlook for all regions remains clouded by geopolitical tensions, resurgence of COVID-19 cases and volatility in oil prices. However, the strength of the recovery varies across regions as it depends on effectiveness of vaccine rollouts, implementation of fiscal stimulus packages, exposure to cross-country spill overs, and structural characteristics of the countries. The policy actions need to provide effective support to revive the global demand and tap export opportunities to spur growth in 2021 and beyond.”


About GlobalData

4,000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, financial, technology and professional services sectors.

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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