Fitch Solutions has raised its projections for the global economy recovery in 2021, with a GDP growth rate of 5.5 percent forecast, up from a 4 percent contraction it projected in 2020.
The new projection came within its report ‘A year ahead, Global industries Outlook 2021’ that was shared with Ahram Online.
Despite that, Fitch stressed that global recovery will be uneven and diverge sharply in emerging and developed economies, especially as the COVID-19 vaccine rollouts will be uneven across the world.
Accordingly, Fitch expected a phased roll-out of the vaccine across three country groupings (based on access to vaccines), with the most vulnerable in the final group to be vaccinated by February 2022.
Moreover, while the outlook across all industries globally is positive-to-very-positive in 2021, as economic activity will pick up in a broader and deeper fashion than what was seen in the second half of 2020, the extent of the recovery will diverge, according to the report.
“Outperforming sectors include information technology, pharmaceuticals and healthcare, and medical devices, all of which will remain on very strong footing in 2021. The consumer sector, which was one of the most impacted in 2020, will see a robust recovery next year, although it will be characterised by the rise of a price-sensitive consumer.”
Meanwhile, heavy industries, which were impacted by falling commodity prices and where capital expenditure was postponed in 2020, including mining, metals, infrastructure, power & renewables, and agribusiness are expected to see some recovery in 2021, according to the report.
Fitch also expected a surge in renewable energy investment in 2021, and an improved outlook for commodity prices to support the agribusiness, oil & gas, metals, and mining industries.
Touching upon the vaccines, the report said that the COVID-19 pandemic has spurred rapid changes in healthcare, including the requirement for a safe and effective vaccine, expecting that to help countries return to pre-COVID-19 levels of business and social activity.
On digitalisation, the report noted that technology adoption and integration has been accelerated across several industries in 2020 as a result of the pandemic and resulting social distancing and lockdown measures.
“We have long highlighted digital transformation as a megatrend; however, this process has been accelerated by the pandemic, especially in healthcare and retail, and we expect these changes to be permanent”, according to the report.
The report also noted that the consumer industry has long been ahead of the curve in technological integration, expecting it to continue to innovate new ways to engage consumers online in 2021, including leveraging e-sports and growing demand for buy now, pay later platforms.
In high capex sectors, tech integration took a back seat in 2020, as cost cutting took centre stage, according to the report.
In this regard, the report expected this to re-emerge in 2021, especially in agribusiness where technology could be used to address food security and supply chain weakness highlighted by the pandemic.