The UN projects average world GDP growth at 2.7Pct in 2021, up from 2.5Pct in 2020 and 2.3Pct in 2019—a ten-year low since the 2008 global financial crisis. The pickup in global activity will likely be driven by somewhat faster growth in developing regions, where several large economies are expected to recover from adverse shocks. East Asia remains the world’s fastest growing region.
In the Least Developed Countries (LDCs), economic growth is projected to accelerate moderately. After increasing at an average rate of 4.3Pct over the past five years, aggregate GDP is expected to expand by 5.1Pct in 2020 and 5.4Pct in 2021. This acceleration will be driven mainly by stronger domestic demand in many countries, including some large economies (Angola, Ethiopia, Myanmar, and Sudan).
LDCs remained largely unaffected by the global slowdown. Yet, LDCs collectively remain far from achieving “at least 7Pct GDP growth per annum,” as per SDG targets. Only 15Pct of the countries—Bangladesh, Benin, Cambodia, Ethiopia, Rwanda, Senegal, and South Sudan—are growing close to that rate. The following countries are scheduled to graduate from LDC status in the coming years: Vanuatu in 2020; Angola in 2021; Bhutan in 2023; and Sao Tome and Principe and the Solomon Islands in 2024. This process will further advance the “Africanization” of the LDC group.
East Africa remains the fastest-growing subregion, and the economic outlook remains favorable, underpinned by vigorous domestic demand and public investments in infrastructure. In addition, the recent peace agreement signed by Djibouti, Eritrea, Ethiopia, and Somalia after decades of hostilities is expected to unlock new investment, trade, and business opportunities in the Horn of Africa. EBR
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9th Year • Jan 16 – Feb 15 2021 • No. 94