For the first time since 2005, the United States is expected to be the world leader in economic growth, overtaking China as the international economy recovers from the coronavirus pandemic.
The U.S. economy is roughly 1/3 larger than China’s, so if they grow at the same rate, as expected, American growth will be larger.
Experts predict the world economy will grow by approximately 6% this year, the fastest rate in more than 50 years, the Wall Street Journal reported.
“The U.S. is going to play the role of the global locomotive again in 2021,” Catherine Mann, the global chief economist at Citibank, told the WSJ.
The U.S. economy contracted by 3.5% in 2020, and is expected to grow by 7% in 2021. The Chinese economy grew by 2.3% in 2020 and is expected to grow 8% in 2021, reflecting the country’s speed in restarting its economy after brutal lockdowns halted the spread of the pandemic.
Europe, meanwhile, is struggling with lackluster vaccine rollouts and slumping retail sales as rising coronavirus cases have prompted governments to reimpose lockdowns. Governments are less likely to passing sweeping economic relief deals than the one recently passed in the U.S. Senate.
The unexpected economic resilience in America reflects the recent $1.9 trillion relief package, the confidence of the Federal Reserve leadership, and the country’s increasingly fast vaccine plan, which is now seeing an average of more than 2 million people vaccinated a day.
Additionally, experts note, the current economic crisis was not brought on by debt or bubbles bursting, so many Americans are sitting on built-up savings that may be spent on leisure activities, events or retail purchases after the country reopens and restaurants and venues fling open their doors.
Additionally, the pandemic accelerated the trend towards online shopping, which encouraged purchasing throughout the lockdowns and only continue to grow in popularity for relative safety and convenience.