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Wall Street Sees World Economy Surging in 2021 From Rocky Start

  • Morgan Stanley predicts global growth of 6.4%, Citigroup at 5%
  • Risks are that unemployment and inflation still stay weak
Canada Leaders Clamp Down On Businesses Again In New Virus Wave
Photographer: Cole Burston/Bloomberg

Wall Street’s biggest banks are predicting the coronavirus-hit world economy will crawl through the early days of 2021 before bouncing back as vaccines and more fiscal stimulus flow into it.

After a year which saw the unanticipated shock of the deepest recession since the Great Depression, economists are bracing for a shaky start to the new year as 2020 ends with a spike in infections and further rounds of restrictions.

The most upbeat are the analysts at Morgan Stanley, who predict an expansion of 6.4% in the coming year and maintain their call for a V-shaped recovery. Less confident are the economists at Citigroup Inc., who predict growth of 5%.

Both would be dramatic improvements on the 4.4% contraction the International Monetary Fund has penciled in for 2020.