The world economy has been dominated by the impacts of coronavirus for the past 12 months; put simply, all economies will be poorer than they would have otherwise been if not for the pandemic. KPMG Australia estimates global GDP to grow at 4.4 percent in 2021; but with considerable variability across countries.
At the start of 2020, Australia was still responding to one of the worst natural disasters the country had ever experienced.
This meant that the Australian economy entered the global pandemic in position of underlying weakness, which should be remembered in the context of considering how the economy has faired since that time.
Australia has weathered the global coronavirus pandemic better than most other countries.
The US expected to recover fastest of G7 economies. Arguably the US has not managed the health response to the coronavirus pandemic as well as other countries. This may reflect an implicit trade-off between containing the economic damage associated with the pandemic and the negative health impacts of the virus on the population.
The UK has been hit particularly hard by the coronavirus pandemic, both in terms of the health outcomes on its population as well as the consequences on its economy. The economic fallout of this pandemic on the UK economy has been severe. GDP fell by 19 percent during the June quarter 2020, with both household consumption and business investment declining by slightly more than 20 percent each.
The Chinese economy is strengthening from rising goods trade. It outperformed the rest of the world during the pandemic crisis, achieving remarkable growth of nearly 2 percent over 2020 after experiencing a 10 percent contraction in 2020Q1.
Full details on the Australian and global outlook can be found in KPMG's Quarterly Economic Outlook.