WASHINGTON: The global economy has passed its pre-pandemic peak, data investigation firm IHS Markit said on Monday, as the recovery accelerates thanks to vaccination and an end to restrictions linked to the pandemic. IHS Markit, which conducts monthly surveys of companies highly regarded by the market as a leading indicator of economic activity, predicts that with 6.0% growth this year, the global economy will post its highest strong expansion in nearly 50 years.

“The global economy reached a significant milestone in the second quarter of 2021, surpassing the peak in real GDP before the pandemic reached in the fourth quarter of 2019,” the firm said in a statement. The second term ends at the end of June. The Asia-Pacific region recovered from the pandemic recession at the end of last year thanks to the resilience of the Chinese economy.

Economists at IHS Markit estimated that US real GDP hit a new high in May. The firm estimates that Africa and the Middle East will return to pre-pandemic GDP in the third quarter which begins in July. Europe and Latin America will complete their recovery in the last quarter of this year.

“As the recovery from the COVID-19 recession is over, the global economy is heading towards the sweet spot of the current expansion,” said Sara Johnson, executive director of global economy at IHS Markit. “Global real GDP growth goes from an annual rate of 1.5% qoq in the first quarter to rates of 6.0-7.0% for the remainder of 2021,” she added.

IHS Markit’s global GDP growth forecast for 2021 is in line with that set by the International Monetary Fund in April. However, the IMF has highlighted the uneven recovery and said it expects many countries not to recover to pre-pandemic levels until 2022 or 2023. The OECD and the World Bank also cautioned against the recovery leaving some countries behind, especially given the lack of vaccines in many countries. IHS Markit has acknowledged that COVID-19 outbreaks remain a risk to economic recovery in places where vaccination has been slow.

He also pointed out that the constraints on the recovery have led to disruptions in the supply of some products, including semiconductors used in electronics and cars. Its investigation “revealed that supplier delivery times extended in May to the greatest extent in the history of the investigation.” One of the reasons for the rise in prices is supply disruptions. IHS Markit said it expects consumer price inflation to rise to 3.3% this year before falling to 2.7% next year as supply conditions are improving.

Investors are increasingly concerned that the rapid recovery in inflation will prompt central banks to remove stimulus measures and raise interest rates faster than previously announced. “In the United States, the euro area and other advanced economies where inflation expectations are well anchored, monetary tightening can be delayed in the short term but not indefinitely,” Johnson said of IHS Markit. – AFP