Buoyed by the global roll-out of multiple COVID-19 vaccines, we think the pace of global GDP growth in 2021 will be close to the fastest in 50 years. Of course, this comes after 2020 saw one of the deepest (albeit short) contractions on record, but it will be a remarkable recovery nonetheless with the global share market revival poised to extend through 2021.
While 2021 will start on a soft global growth footing, risks are biased toward upside economic surprises later in the year. Assuming a successful vaccine roll-out, we anticipate a sustained relaxation of restrictions in many advanced economies in the second quarter, triggering a strong acceleration in growth by mid-year that will extend through the second half.
It may take a few months to crystallise; however, the ultimate market narrative in 2021 is likely to be one of synchronised global growth. In our final asset allocation report for the year we share our global outlook for 2021, examining:
- Cyclical and structural shifts in demand
- Global and local equities in 2021
- The benefits of a broader global recovery on China and emerging market performance
- Movement in global bond yields
- Continued US$ weakness
- Potential risks to our strong recovery view
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Disclaimer
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Written by
David Cassidy, Head of Investment Strategy
David is one of Australia’s leading investment strategists.