KIEL INSTITUTE ECONOMIC OUTLOOK - World Economy Summer 2021

Production 3.0 100 fell markedly in the UK or Japan and growth 1.0 slowed in China, while the expansion in the rest 99 -1.0 GDP of Asia continued at a high pace and economic momentum even increased in the United States. [...] restrictions on economic activity to contain the pandemic are being lifted and activity in contact intensive sectors such as hospitality is rebounding in the euro area and the UK, following a pattern already witnessed in the US during the first quarter. [...] Against this backdrop, the increase in world trade is likely to have paused in the second quarter after strong growth in the first three months of the current year. [...] We expect GDP to increase by 6,7 and 4,1 percent in 2021 and 2022, respectively, and the unemployment rate to fall to the low levels recorded prior to the pandemic. [...] At the same time, the economic repercussions of the UK’s exit from the European common market continue to weigh on the economy contribute to a relatively slow return of output to pre-crisis levels.