A look at the world economy

The world economy recovery was still going on in November but not as strongly as in October, according to PMI survey results published December 3 by IHS Markit. Sign of better days to come "Business optimism surges to highest since early-2014 on vaccine hopes".

In its Economic Outlook published in early December, the OECD forecasts that world GDP will grow by 4.2% in 2021 and 3.7% in 2022 after a decrease of 4.2% in 2020.

Canadian economy: the expansion phase will have to wait until the beginning of 2022

Canadian real GDP grew approximately by 10% in the third quarter, according to Statistics Canada's preliminary estimate published last October 30. That growth follows two quarters of contraction concentrated in March and April.

In its Monetary Policy Report, published October 28, the Bank of Canada mentionned that the progression of the economy from July to September reversed "... about two-thirds of the decline observed in the first half of the year..." (page 13). The Bank projects that the economic activity will grow by only 0.2% in the fourth quarter. Growth would be stronger in 2021 and 2022 to average close to 4% in both years. " This implies that GDP does not return to its pre-pandemic level until the start of 2022..." according to the Bank (page 18). This means that the economic phase of expansion would only begin at that time.

"A long and difficult ascent", according to the IMF

 The International Monetary Fund (IMF) published October 13 its most recent "World Economic Outlook". Gita Gopinath's blog gives a very good summary of its content.

Link to her blog.

July, first month of world economic growth...

...since the beginning of the pandemic recession, according to PMI data, published by IHS Markit. But, the expansion of the activity was quite weak.

The canadian economy could have reached a trough in April

Mid-July, the Bank of Canada published its Monetary Policy Report. It indicates in it that the canadian economy "... appears to have hit bottom in April..." (page 11). Since it peaked last February, that would make it the shortest recession recorded in the country. The depth and the scope of the contraction qualify it as a recession, even if the slowdown was really short.

In their quarterly report, the Bank's economists present their projections for the canadian economy...

...and the world.

World economy: PMI suggests that the contraction is easing

PMI results suggest that the contraction in economic activity eased significantly in June. The most recent analysis on this subject was published July 6 by IHS Markit.

Modest growth of the world economy, according to the IMF

The IMF published, January 20, its World Economic Outlook Update. Production growth could be higher in 2020 and 2021 than in 2019; however, it would still be under the historical trend.


The downward risks associated to these projections remain important, according to IMF economists. Geopolitical tensions in the Middle East, trade disputes between the United States and its partners, social troubles in countries like India and extreme climatic conditions could influence negatively economic conditions. Add to those the consequences of the eventual contagion of the coronavirus.