While a difficult few months lie ahead for many economies, the news of effective vaccines has led us to revise up our world GDP growth forecast by 0.8%-pt and 0.5%-pt, to 6.8% and 4.6%, in 2021 and 2022. The positive effects will be biggest in DMs, while China looks set to lose out from a shift in spending from goods back to services in advanced economies. For the world as a whole, there are reasons to think that activity will not quite return to its pre-virus path in the next two years, but it should come close.
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