Economic development forecasts 2021 for Eastern Europe and China
— Press release —
Eastern Europe
According to the Economist, in 2021, as the world economy bounced back from the pandemic the recovery will be uneven across countries. The Eastern Europe’s GDP, for instance, is projected to grow by 3.8 %, while Macau (China) tops the growth rate chart with its 35%.
The Economist forecasts modest recovery for the Eastern Europe. This year almost none of the countries from the region will fully rebound from the recessions induced by the Coronavirus.
Poland makes one of the exceptions. Its economy will be boosted by the budgetary support and rally in private consumption, showing GDP growth 4.2% and inflation 2.4%.
Romania will show a limited recovery. Despite economic rebounds with GDP rise of 4.2%, the budget deficit is projected to increase significantly to 6.6% of GDP in 2021.
Russia’s GDP 2021 will grow by 3% and inflation will reach 3.9%. Russian regions were affected by low oil prices, soft global demand, uncertain fiscal policy and Western sanctions.
Ukrainian economy will grow by 5.7% with 6.6% inflation rate. The pandemic and the lockdown wiped out many economic achievements. At the same time international investors expect Ukraine to resume its reforms on further economic growth.
The inflow of EU funding, with a $6.5bn grand, will help Hungary recover from the pandemic. GDP will grow 4.8% and inflation will reach 2.7%.
After a several recessions due to the Covid-19 the Czech Republic economy is improving as domestic and foreign demand recover and fiscal measures provide further support. The Economist analysts expect GDP to expand 4.4% in 2021 with inflation 1.9%.
So, the Eastern Europe is expected to recover, regional GDP sets to return to growth in 2021. However, the speed of recovery will depend on many factors, including further pandemic trajectory and impact.
China
Since economic and social stability is the Chinese government’s top priority, overcoming the Corona crisis seems to be its main task. Although China is the very first country affected by the virus, it is one of the few countries in the world with economic growth in 2020. According to the International Monitory Fund, China is the only G20-county that ended the previous year with unexpected economic growth. Due to economic rebound, GDP increased by 4.9 percent in the third quarter of 2020.
What should be expected in 2021?
According to Asia Bridge, the analysts expect positive figures again this year: 7.5% (USB), 8.2% (IMF). The Economist analysts expect that GDP growth will reach 7.3% in 2021. In view of such promising trends, China is still considered an attractive trading location for many foreign investors.
According to the “Made in China 2025” strategy, starting from this year Chinese government should focus on various future industries such as: development of 5G applications, biotechnology and vaccine development, high-end manufacturing, new materials for aircraft and chips, environmentally friendly energy technologies, smart vehicles and digital products. (Sources: Asia Bridge, The Economist)