However, the recovery will be uneven across countries. China’s GDP is expected to be almost 10% larger by the end of next year relative to 2019, driving overall global GDP to pre-crisis levels. But economic output is projected to remain well below pre-crisis levels in many countries by the end of next year (Chart). Countries with effective test, track and isolate systems, and where vaccination will be deployed rapidly, are expected to perform relatively well, despite ongoing weak global demand. The outlook for emerging markets is particularly precarious because of overwhelmed health care systems and the likelihood of limited vaccination of populations by the end of 2021; the greater importance of severely affected sectors, such as tourism; and relative dependence on external finance, including remittances.
In the medium term, economic scarring—including through lower workforce participation, bankruptcies of previously productive firms, and the subsidised survival of low-productivity firms—is expected to see economic output remain persistently weaker than projected prior to the pandemic. The IMF estimates an output loss relative to pre-COVID expectations that will grow from US$11 trillion in 2020-21 to US$28 trillion in 2020-25 (equivalent to around a third of total current global GDP).