As businesses and governments look ahead to 2021, predicting future trends becomes necessary for strategic planning and informed decision-making.

Three key themes emerge: A record-breaking global economic growth, an uneven recovery across sectors and countries, and a synchronized push for green infrastructure.

The global economy is projected to expand by around 5% in market exchange rates, marking the fastest growth rate recorded in the 21st century. This optimistic forecast is due to the successful deployment and spread of effective COVID-19 vaccines, as well as continued accommodative fiscal, financial, and monetary conditions.

However, the next three to six months will remain challenging, especially for Northern Hemisphere countries dealing with winter-related restrictions and potential lockdowns.

Economic growth is expected to get back up in the second half of 2021, driven by widespread vaccination efforts and easing restrictions, and by the end of 2021 or early 2022, the global economy is projected to revert to its pre-pandemic level of output, signaling a huge recovery, but this recovery will be uneven, with some economies thriving while others struggle. China, for instance, has already surpassed its pre-pandemic size.

Advanced economies, particularly those with service-based or export-focused industries, will face challenges in recovering to pre-crisis levels. Unemployment rates are expected to rise, disproportionately affecting low-income earners and exacerbating income inequalities.

In response, governments will shift focus from combating COVID-19 to addressing unemployment, upskilling their workforce, and creating jobs in emerging sectors. The world’s major economies – the US, EU, and China – will prioritize fighting climate change, investing in green infrastructure, and promoting sustainable growth.

Green infrastructure investments will increass, with global green bond issuance expected to exceed $500 billion for the first time, and renewable energy sources, particularly solar PV, will continue to gain momentum, driven by growing capacity in the EU, India, and China.