The Covid-19 pandemic will produce lasting shifts to global growth, pushing China even more to the forefront.
The proportion of worldwide growth coming from China is expected to increase from 26.8 per cent in 2021 to 27.7 per cent in 2025, according to Bloomberg calculations using International Monetary Fund data.
That’s more than 15 and 17 percentage points, respectively, higher than the US share of expected global output. India, Germany and Indonesia round out the top five largest growth engines, next year.
The fund now forecasts world gross domestic product to shrink 4.4 per cent this year, an improvement from the 4.9 per cent drop seen in June, according to the latest World Economic Outlook released this week. Next year, the IMF sees growth of 5.2 per cent.
The IMF estimates China will grow by 8.2 per cent next year, down a full percentage point from the IMF’s April estimate but strong enough to account for more than one-quarter of global growth. The US is expected to rally to a 3.1 per cent increase which will account for 11.6 per cent of global growth in 2021 in purchasing power parity terms.
By 2025, the cumulative loss in output relative to the pre-pandemic projected path is projected to grow to $28 trillion.
“While the global economy is coming back, the ascent will likely be long, uneven, and uncertain,” Gita Gopinath, IMF’s director of research, wrote in the report.
The five nations with the highest Covid-19 death counts — US, Brazil, India, Mexico and UK — are forecast to suffer a total GDP decline of nearly $1.8 trillion in nominal terms and $2.1 trillion after having been adjusted for differences in purchasing power.