February 2021

Bright spots as Covid-19
continues to strike
Atradius Economic Outlook

Atradius Economic ResearchJohn Lorié, chief economist
Dana Bodnar
Theo Smidjohn.lorie@atradius.com+31 (0)20 553 3079
dana.bodnar@atradius.com+31 (0)20 553 2169
theo.smid@atradius.com+31 (0)20 553 3165

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Copyright Atradius N.V. 2021

Executive summary
After a major downturn of the global economy in 2020 caused by the Covid-19 pandemic and despite
renewed lockdowns in some parts of the world, there we expect the global economy to rebound in 2021.
Several vaccines have been approved and are in the process of being rolled out, allowing for a gradualreversal of lockdown measures. Meanwhile fiscal and monetary support remains essential while
countries return to normal economic life. There is considerable uncertainty around our baseline forecast,given the possibility of a delayed recovery, which may occur if there is a stretched wave of global
infections. This would significantly reduce GDP growth in 2021 and effectively push the recovery into
2022.

Key points
 As countries gradually emerge from their lockdowns, we expect global GDP to recover by 5.0% in 2021, following a 3.9%
contraction in 2020.
 Prospects for global trade in 2021 are good, following a revival of trade growth in the second half of last year. Global trade
growth is expected to rebound by 7-8% in 2021, after a contraction of similar size in 2020.
 After economic downturns in 2020, advanced markets as a group see growth rebounding by 3.9% in 2021, after a 5.0%
decline in 2020. The pace of recovery deviates, but most advanced markets do not completely recover in 2021 from theGDP contraction they experienced last year.
 In the Eurozone, economies continue to be in relatively strict lockdowns. A partial recovery of 4.2% is likely to occur in
2021 and only in 2022 is activity expected to return to pre-pandemic levels. National governments are expected tocontinue fiscal stimulus well into 2021.
 The virus poses serious downside risks to the US economy in 2021, but economic growth is forecast to rebound as therollout of vaccination allows lockdown measures to be gradually reversed. Moreover, the new government reduces policy
uncertainty, and a new major stimulus plan for the economy is in the making.
 In Japan, infections were brought under control in the first half of 2020. As a result, the economy is off to a good start in
2021, though it will not fully recover from the recession of last year. If held, the Tokyo Olympics will provide a temporary
boost to GDP in 2021.
 Many emerging market economies (EMEs) are still at a critical stage in the health crisis, though there are large differences
between countries and regions. Asia is head of the curve in controlling the number of infections. Emerging markets as agroup are forecast to grow by 6.3% in 2021, following a 1.9% contraction in 2020.

3 | Atradius Economic Outlook – February 2021

1. The global macroeconomic environment
Late autumn game changers
The pandemic has not yet left us. Following a relatively shortperiod of relief during the summer in the Northern
Hemisphere Covid-19 infections started to rise again andpublic health measures in a number of countries have retightened. The undercurrent of gloom that had persisted overthe summer was reinvigorated and still hangs on. This is notwhat we had expected in May when we published our latest
Economic Outlook.
Gloom is not irrelevant economically. It translates into
economic uncertainty, and is currently its dominant, but not
only source. The US election, the EU struggles to come up
with a post crisis recovery plan and a new, post-Brexit, traderelationship with the UK were all big issues hanging over the
global economy as we progressed into winter. The strong
rebound of economic activity during the third quarter
seemed no more than transitory.
Then, in November, bright spots appeared. First andforemost, of course, the news came out that Pfizer/BionTech,
Oxford/Zeneca and Moderna had successfully developed
Covid-19 vaccines. This sudden announcement was clearly
earlier than expected. Mass vaccination is still fraught withuncertainty, but the outlook is suddenly brighter. Second,
just predating the vaccine news, Joe Biden was elected thenext US president, and confirmed early December. Whilst theeconomic record of the Trump administration was not as bad
as perhaps sometimes thought,1 policy uncertainty
dominated the Trump tenure, especially hamperinginternational trade. With that out of the way, the outlook can
be expected to brighten as well. Third, the EU moved ahead
with the approval of the EU budget for an amount of almost
EUR 1.1 trillion, including the European Development Fund,and, additionally, the EUR 750 billion Next Generation EU
recovery fund.2 Both are instrumental to funding the post
pandemic recovery for the period up to and including 2027.
Again, the outlook is brightened. Finally, after more thannine months of gruelling negotiations, the EU and the UK
struck a deal on their post Brexit trade relationship. One canargue that this is not something to cheer about, and certainly
not loudly. After all, it is essentially only a free trade zonethat was agreed, very far away from the economically more
beneficial customs union, let alone an agreement close to the
For example, credit can be given to the Trump administration forthe swift implementation of a generous support package following
the outbreak of the pandemic.
12

Also known as Pandemic Recovery Fund.

We have never removed the ‘some deal’ scenario from ourforecast, judging that the underlying economic reasoning was
3current one of a communal market. But judged against what
was for some increasingly looking like the baseline
scenario,3 a no deal Brexit, it is a success.
Whilst these developments remove underlying causes of
uncertainty, and as far as the pandemic is concerned, we arefar from being out of the woods. There are two relevant
developments here. First, Covid-19 infections are still leaping
up on a global scale, despite lockdowns being re-imposed.
Total cases have now reached 88 million, with 1.9 million
deaths. Badly hit are the United States with about 22 million
registered and 370,000 deaths (as per January 10). European
countries, including Russia, have reached almost 29 million
cases and 625,000 deaths. In Southeast Asia, which includes
India, the situation is more under control, with registeredcases standing at 12.2 million and 188,000 deaths. EspeciallyChina, were it all started, has hardly any cases recently.
Second and perhaps more worryingly, two mutations of thevirus have been detected. One in the UK, B117, which isestimated to be 50-70% more transmissible. On the positiveside, current vaccines offer effective protection. The otherone, detected in South Africa, is believed to be lesstransmissible, but vaccines may be less effective. In bothcountries registered cases have sprung up since late
December, answered by tough lockdowns, especially by the
UK government. This clearly works against the positive
developments we have seen in November, putting a break on
the decline in uncertainty and immediately affecting shortterm economic activity. Uncertainty reduces demand fromfirms and consumers in general, lockdowns ban supply of
specific services such as those provided by restaurants,
hitting supply and demand simultaneously.

simply too compelling. As the mood was already changing in British
political circles towards a deal outcome, the traffic chaos in SouthWest England following the temporary border closures with France(and a host of other countries) after a mutated Covid-19 had been
detected in the UK has almost certainly helped as well.
Atradius Economic Outlook – February 2021 | 4

1.1 Policy uncertainty near all-time highBox 1 The economics of lockdowns

Index

Most countries have imposed lockdowns, with varying strengthand duration, to contain the spread of the virus in early 2020and during the second wave in late autumn. During these
periods, economic activity fell dramatically. This has triggered
research into the question: how damaging are lockdowns for
economic activity? Whilst the research is still in progress, workby the IMF provides some clues. We discuss these in this box.
We would like to stress at this stage that lockdowns are notthe only cause of economic contraction. This is because thepandemic also prompts adjustment in behaviour, in the sensethat people are more careful with their contacts. The term
voluntary social distancing captures this. It damages the
economy as people simply stay away from hotels, restaurants,
stores and travel to avoid infections.
The first question the IMF attempts to answer is how mucheach factor contributes to the recession during lockdowns. To
this end, the outcomes for the stringency index and fall in GDP
are plotted in the graph above. It shows that the relationshipbetween stringency and fall in GDP is a negative one. Or, more
stringency is accompanied by a higher GDP contraction. It
persists even if the severity of the economic recession iscontrolled. Therefore, as expected, lockdowns, as such, areshown to have a negative impact on economic activity. But it is
no more than suggestive evidence as GDP might affect thelevel of stringency as well; richer countries can simply afford
more stringency as well. For that reason the analysis iscomplemented with one where mobility data is included rather
than GDP. That research confirms the impact of lockdowns.
Moreover, it suggests voluntary social distancing resulting
from fears of being infected are detrimental as well. It plays arole comparable to lockdowns.
The other question the IMF looks into is to what extent
lockdowns effectively reduce infections. This is relevant,because to the extent they do, lockdowns not only haveeconomic costs, but also economic benefits: they reduce theneed for social distancing after the lockdown. It turns out
lockdowns are effective, at least if sufficient stringency is
imposed. A reduction of 40% of infections over a period of 30days is feasible in such case. Moreover, timing matters: theimpact of a lockdown on infections is higher if the lockdown is
imposed in the early stage of the pandemic.

The imaginary V-shaped recovery now looks like on where thesecond part of the V is much longer and flatter.
4

5 | Atradius Economic Outlook – February 2021

A deep 2020 recession
The pandemic pushes the global economy into a deep
recession in 2020. It is now expected to shrink by almost 4%.
No region will escape the recession, although GDP growth in
Asia, is expected to remain only slightly below neutral. This
figure is heavily - and positively - influenced by China,
where after a hit in the first quarter as the pandemic peaked,
growth resumed bringing the full year figure into the black
at 2%. The other regions show a pattern around the global
average seen in 2019 as well. The badly hit Eurozone is doing
much worse, just like Latin America where economic woes in
Brazil and Argentina continue, now - worsened by the
pandemic. The United States and Eastern Europe are
performing slightly better than the global average of 4%.
Especially the United States, badly hit by the pandemic,shows remarkable resilience.
These overall figures give rise to several comments. First,
regional GDP development during 2020 was very uneven
during the year, showing a very strong correlation to the
spread of infections and public health measures. With the
exception of China, all regions took a severe economic hit in
Q2. The Eurozone and the US posted 15% and 13% GDP
shrinkage y-o-y. In the third quarter there was a very strong
rebound as the pandemic temporarily receded. In the US
economic activity almost returned to normal. But the surgeof the pandemic during Autumn now impedes further
recovery in Q4, in the Eurozone even more than in the US.4
China, indeed, is the exception. Free from any material
Covid-19 cases since late March the country recovered
strongly and unhampered. Second, the estimated figures for2020 imply significant differences with our May 2020
forecast, especially for the US and to some extent China.
Several factors are at work here. That made forecasting
particularly difficult. Uncertainty based on the pandemic,
absent lockdowns. Then the impact of the lockdowns, in all
its variety. These in turn are alleviated by generally verystrong fiscal support packages and monetary stimulus. Thisunique mix affects the behaviour of firms and households.
The direction is clear, less spending. But how much? In the
US for example the savings rate in Q2 almost quadrupled (to26%), in the Eurozone slightly lower but still very high ratios
were recorded. Still, the impact of the crisis in Q2 wasgenerally overestimated. Underestimated, in turn, was thestrength of the recovery in Q3, when lockdowns were eased
and uncertainty reduced, with Q4 still to be reported. In all,we were too pessimistic in May: the 2020 global economy is
1% point less worse off. This, in turn, largely explains why
the recovery in 2021 is less pronounced than expected
earlier. Third, the figures mask a very uneven sectoraldevelopment. This is not so much visible in the downturn of
Q2, bot services and industrial production were severely
affected. Indeed, services such as accommodation and foodcatering (-39% y-o-y decline in value added in Q2), leisure (19%), transportation and travel (-40%) are badly hit.5 But so isindustrial production such as in car parts (-35%) andAerospace (-32%). The point is that the recovery in services issignificantly slower, highlighting the role of lingering
uncertainty on economic behaviour as lockdowns are eased.
In Q4 the services sector contracted 3.1% y-o-y and industrial
production shrank 1.8% globally. On the back of the latterdevelopment, with goods production up, global trade has
started to recover as well.
Table 1.1 Real GDP growth (%) - global regions
2019

2020e

2021f

2022f

Eurozone

1.3

-7.1

4.2

4.9

United States

2.2

-3.5

4.2

3.4

Emerging Asia

5.1

-0.3

7.4

5.1

Latin America

0.7

-7.1

5.4

3.1

Eastern Europe

2.5

-2.8

3.2

4.4

World

2.5

-3.9

5.0

4.3

Sources: Oxford Economics, Atradius
1.2 Change in 2021 GDP growth forecasts

Change in 2021 GDP growth forecasts

Percentage point change since May Economic Outlook
United Kingdom
Spain
Netherlands
Italy
Germany
France
-6

-5

-4

-3

-2

-1

0

Sources: Oxford Economics, AtradiusSpectacular declines are also reported in tourism. On a global scale
there were 72% less bookings compared to 2019, with rather
limited regional spread (only Asia even worse: -82%).
5

In brief, 2020 shows a deep pandemic driven recession,
widely dispersed geographically and between sectors.
Recovery occurred after the Spring wave, but is hampered by
the resurgence of the virus. Now that a vaccine is available,
the picture for 2021 (and 2022) looks a lot brighter, and isfurther strengthened by US political developments, EU
resolution to support the recovery as well as a EU-UK trade
agreement. Virus mutations such as B177 and possible
lengthy winter lockdowns prevent this picture frombecoming too rosy. Governments and monetary authorities
have gone all out to alleviate the pain.

Strong rebound in 2021
Under our baseline scenario, the global economy is expected
to grow by 5.0% in 2021. This means that, by the end of 2021,
the impact of the crisis will be wiped out. In other words, forthe global economy we are back to the GDP level of 2019 atyear end. But the recovery will be uneven. Emerging Asian
countries, led by China and India, will recover much morestrongly than the rest of the world.6 Europe and SouthAmerica, on the other hand, are laggards. They will only
reach 2019 GDP levels again somewhere deep in 2022. The
US and Eastern Europe keep the middle ground, restoring
GDP levels before 2021 year end. This forecast marks anacross-the-board lower GDP growth than presented in May.
It is, predominantly, the result of the forecast adjustments of2020 we discussed above.
With the public health measures gradually lifted during 2021
as the vaccination process progresses the services sector is
expected to show strong recovery. Some of these sectors,
such as travel, were at a very low level during 2020. Even
only gradual easing of restrictions will help spur demand,from a very low level. Such pent-up demand can be expected
for industrial production as well, but more limited as pent-up
consumption demand will re-orientate towards services.
This picture is built on seven key interrelated assumptions.
Firstly, the current resurge of the virus, especially in Europe,
will be contained and not spread globally, like in the Springof 2020. Social distancing measures, in the severest form,
will not last the full Q1 period. Mutations of the virus, such as
B117 and the South African variant, are contained. Second,and underpinning the previous point, vaccines will be widely
available as of mid- 2021. The vaccination process is rolled
out, in combination with herd immunity being achieved, tothe extent that as from mid-2021 economic activity canrecover more or less unhampered. Third, government rolls
back the strong fiscal support that we saw in 2020 as the
pandemic is controlled. But it does not mean fiscal tightening
to the extent we saw after the Great Financial Crisis. Rather,
the government carefully crafts a gradual retreat of direct
support and actively helps the recovery take off. Fourth, andTo be more precise, they will reach this level in the course ofJanuary 2021. The calculation is: (1-a)*(1+b) (1/months) with a = growthrate in 2020, b= growth rate in 2021, so (1-0.04)*1.073(1/12)*12=
100.19 by the end of January 2021.
6

Atradius Economic Outlook – February 2021 | 6

especially important for governments to be able to play theirdescribed role, monetary policy remains lax to extremelylax. Tightening by way of reducing or even stopping asset
purchases by central banks, let alone rate hikes, arepostponed until the recovery is on a strong footing. This
supports not only firms but, perhaps more importantly,
allows governments to borrow at low cost and thus help
them support the recovery. A precondition for this policy isthat inflation remains subdued, for which a muted rise in oil
prices as the recovery picks up is key. Fifth, helped by low
cost of money and ample availability as central banks
remain in stimulus mode, investor sentiment is kept up.
Stock markets, important, particularly for US consumption,
remain at the – high – level of 2020. Sixth, economic
scarring, manifest in lower capital outlays, labour supply
and technology growth remains limited. That is to say
government measures limit the erosion of skill sets of
employees and the dismantling of firms and insolvencies.
This is crucial for the supply side of the economy to remain
more or less intact, and avoid a situation where pend-up
demand in the recovery cannot be met by supply, reflecting
in soaring inflation. Scarring is only to remain restricted if
indeed there is timely control of the pandemic. The longer
the pandemic lasts, the more scarring occurs. Seventh andfinally, the trade war, especially between China and the US,
does not resume. China and the US, under the new Biden
presidency, will gradually ease some, but not all, of thetariffs built up during the Trump period. What is more, theUS trade policy will resume to normality, with collaboration
rather than the threat of war with the EU. Therefore, trade
policy uncertainty is reduced and trade recovery is spurred.

Global trade in revival mode
Global trade has, thus far, positively surprised in 2020. We,
and others, expected a depressing picture resembling what
happened during the Great Financial Crisis. Some even
expected a collapse of 30%, based on the GDP contraction
back then.7 Our forecast was seeking the middle ground witha 15% contraction, relying on an Oxford Economics guidanceof 2-4 times the GDP shrink (of 5%). This is no longer tenable.
Global trade contraction is now expected to come in at 7-8%
in 2020, with a rebound of similar size in 2021, leaving thelevel of global trade in goods by the end of 2021 still below
2019. Further, although slowing, recovery is expected for2022.

1.3 Global trade shrunk in 2020, but less than expected% change y-o-y in 12-m rolling volume of goods trade
15,0
10,0
5,0
0,0
-5,0
-10,0
World

United Euro Area
States

2017

China

2018

Emerging Eastern
Latin
MENA
Asia ex Europe America
China
2019
1-10-2020
Source: CPB, Atradius

1.4 World trade momentum returned in H2 of 2020
World trade momentum vs. export order momentum
50
40
30
20
10
0
-10
-20
-30
-40

World trade momentum

World export orders momentum
Source: CPB, IHS Markit, Atradius

The data provide support. CPB figures up to and including
October 2020 show y-o-y contraction of global trade close to6%.8 This relatively favourable figure can be largely
attributed to China, where trade grew by 3%, as opposed toother regions where trade shrank considerably (more than8%). Trade momentum,9 moreover, has strongly rebounded
after declining by more than 10% in the beginning of 2020.
The swing in export orders has even been more pronounced:
a dramatic decline of almost 30% was followed by a reboundof 40% over the summer. Both forward looking indicators,
which have now resumed their course towards normality.
Further support for better-than-expected turnout comesfrom global port data. The RWI/ISL container throughput
index continued its strong increase and was 6% up in
November. The indicator is heavily impacted by the strong
developments in Pacific trade between China and the US
West coast.10
One can question why this picture deviates so much from theone forecasted earlier, which was done with an eye on the
Great Financial Crisis. Several answers can be given. First,

7This is not as outrageous as it seems if one considers that during
the Great Financial Crisis GDP shrank 0.1% and global trade 13%.

9

These are 12 month rolling average figures compared to theprevious period. The October 2020 figures therefore cover acomparison of October 2020 – 2019 period compared to October
2019 -2018.

10

8

7 | Atradius Economic Outlook – February 2021

Trade momentum is defined as the three months average tradelevel compared to the one of the previous three months.
This indicator of the Leibnitz Institute for Economic Research andthe Institute for Shipping Economics collects data on container
shipment of 91 ports. See https://www.isl.org/en/containerindex.

China recovered stronger and faster than envisaged. The
country provides stimulus of a kind that we have seen after
the Great Financial Crisis, as well: on the supply side. This
neatly fitted the consumer driven stimulus elsewhere,
predominantly in the US. This picture of US demand met by
Chinese supply explains the surge in China-US trade, despite
tariffs. Second, the impact of Covid-19 on GDP is skewed
towards services, with industrial production faring relatively
well. Services, such as restaurant or cinema visits, aregenerally less traded than goods. That implies that thechange in GDP provides less guidance for developments ingoods trade. With industrial production holding up relatively
well, and recovering faster, including in a large economy
such as Germany, trade is expected to keep up as well. Third,
trade restrictions on medical goods and medicine have fallen
since the start of the pandemic, reportedly by 15%.Moregenerally, the US administration focused on the economic
fall-out of Covid-19 and the US election. The trade war with
China, and potentially other regions such as the REU weremoved to the backburner. . That reduced trade policy
uncertainty. Fourth, whereas during the Great Financial
Crisis banks pulled the strings and even retracted from tradefinance, finance conditions remained fairly loose. So far,central banks pursued a very lax monetary policy to support
the economy. Fiscal policy provided support as well. Tradefinance benefitted from this.
Over the forecast period, 2021-2022, we expect to see arecovery that mirrors the decline of 2020. That is to say,services will grow faster than production.11 This means thatthe link between trade and GDP recovery will weakensomewhat. But the recovery as such will help global trade,just like other factors will. Especially US trade policy will beless protectionist during the Biden presidency. Tradeuncertainty as to further tariff levies or even trade wars (forexample with the EU) will fade, and some tariffs may evenbe reduced. This helps trade. The trade agreement of the EU
and the UK has a similar but smaller effect: taking away
uncertainty. We therefore think our forecast of 7%-8% growthin 2021 is justified.

end up at USD 35 in late December. That crisis, moreover, wehave already noted, was far less severe than the current one- in terms of GDP hit. Under our baseline scenario, we expect
no large - sustained - movement in the oil price over theforecast horizon.
The underlying fundamentals of the oil price were severely
affected. In Q2, when the crisis erupted, demand fell by 9
mb/d or 16% as a result of lockdowns and reduced mobility
more generally. Transport and travel disruptions had a large
impact on oil consumption, transport accounts for two-thirdsof global consumption. The decline is broad-based, withdemand falling most severely in the EU. China is the
exception. Chinese consumption started to grow y-o-y in Q2
and has continued since as activity rebounded and stocks
were filled, benefitting from the relatively low prices. In therest of the world, consumption started to pick up as
lockdowns were eased. By the end of the year, oilconsumption was still about 6% below the 2019 level.
The impact on the oil price of the demand decline wassoftened by reduced oil production, which fell 12% to 88
mb/d in Spring and has only gradually gone up since,
staying below consumption for the rest of the year. Stockbuilding took place during the first half of the year, after
have remained at a high level. Production cuts were driven
by large reductions by OPEC+ countries,12 initially almost 10%
in the Spring, after which it was gradually tapered.
Compliance has been remarkable, with Saudi Arabia taking
its role of ‘swing producer’ seriously. Early January, amid
renewed pressure from an upsurge of the virus and pressure
from Russia to ramp up production, the country announced aunilateral reduction of its production for February andMarch. Production in other countries, notably US andCanada, fell far more, by 20% in May. Since then it has only
partially recovered, though only to 10% below pre pandemic
levels. The upshot is that production is currently broadly inline with demand, and inventories are still rather high. A
situation of relative stability.
1.5 Oil price partially recovered

Oil price stabilisation
No surprise, the oil price was not left untouched by the
Covid-19 crisis. Early January, it was USD 70 per barrel
Brent. Then, a hefty decline followed in the early weeks of
the Covid-19 crisis, where it briefly even touched USD 9. But
the price subsequently recovered to USD 40 per barrel. It
fluctuated around this level, more or less, until early
December, after increasing above USD 50. On averagethough, the price was 35% lower than in 2019. Nevertheless,in view of the severity of the crisis, the current oil price looks
relatively stable. Back in 2008, during the Great Financial
Crisis, the price moved from USD 90 to USD 145 mid-year to

11 Note that there is a strong base effect here as for example travel andtourism recover from a (very) low base. Recovery to pre-pandemic
levels will be slow.

OPEC+ countries are the traditional OPEC countries plus partners
included in a particular production agreement, of which Russia isthe largest.
12

Atradius Economic Outlook – February 2021 | 8

Whether this lasts is an open question. Calm in the oilmarket, never lasts long.13 Anyway, in our view, the oil priceis unlikely to move a lot higher than around USD 50 per
barrel Brent over the forecast period. Neither is it expected to
be a lot lower. There are several reasons why we think this is
the case. Demand is expected to increase as the economic
recovery takes off during 2021. Such demand increase will
be met by OPEC+ production increases and perhaps somemore drawing on inventories. This allows OPEC plus Russia
to increase oil revenue without giving up market share to
North American shale producers. These latter may only
bounce back at a minimum price of USD 60 per barrel, whichis therefore an upper boundary. Moreover, with Saudi Arabia
now having shown to be willing to stabilise the global oil
market, the downward risk is limited as well. OPEC countries
can simply not afford to let the oil price slip too much.
Therefore, we think the price will remain in the low USD 50s
on average, with a lower boundary at USD 45 and upper at
USD 60 per barrel Brent.

Indispensable monetary
support to continue
As the Covid-19 crisis erupted in early Spring, central banks
were quick to react and ramped up their accommodative
policy stance under the banner ‘Whatever it takes’. The Fed
quickly cut interest rates, announced unlimited quantitativeeasing and propped up markets with liquidity, including
direct lending to small business. The Bank of England acted
in similar fashion. The ECB was only slightly more cautious,
as reflected in the more gradual – but still steep - growth ofits balance sheet, whilst omitting direct lending.14 Central
banks of China, India and Brazil launched rate cuts andliquidity programs, signalling significant monetary easing as
well.
This global monetary stance is set to continue and only
gradually tighten during the recovery, which we expect torun well into 2022. We see continuation of markets flooded

The main reason for this is the low elasticities of the supply anddemand side that characterise the oil market. That implies a fairly
large price movement is needed to clear the market.
13

9 | Atradius Economic Outlook – February 2021

1.6 Ballooning central bank balance sheets

1.7 Policy rates at historical lows

Percent

Such a level, which underlies our forecast, has implications
for economic development. The issue is that this level isdeflationary. This may sound paradox as we have argued inprevious outlooks that a relatively low oil price is, quoting
the then IMF Managing Director Lagarde, a ‘shot in the arm’for the global economy. Simply put, the loss for the oil
exporters is more than outweighed by the benefit for theimporters. But in this Covid-19 crisis, this argument is notthat strong. The reason being that in a lockdown, no matter
how low the oil price is, there will be substantially reduced
demand for transport and thus oil. The result is global
savings and contracting global economic activity, indeed
putting downward pressure on general prices (inflation) as
well.

with liquidity, relatively loose credit conditions and low
inflation, led by the Fed. These are necessary, but not
sufficient conditions for the recovery that is envisaged under
our baseline scenario. For the latter to take off well, more isneeded: fiscal support, which we will get to later.

The current Fed program has a size of USD 2.3 trillion. In
September the Fed provided additional forward guidance tothe financial market by announcing that it would allow
inflation to temporarily exceed the 2% benchmark as long as
economic circumstances, especially in the labour market,
require. That relieved upward pressure on longer-term
interest rates. Then, after a brief period of tapering the Fedannounced in June that it would push ahead withquantitative easing of at least USD 120 billion a month, until
further notice. Moreover, facilities to keep credit markets
functioning were extended until the end of Q1 2021. The
oddity was that the US Treasury ended the Main Street
Lending Program to SMEs by year-end 2020. 15 However,under the Biden administration a program of this kind is
expected to be restored. The Fed, after hitting the accelerator
in Spring 2020, now signals a wait-and-see approach as tomore action.
Not so much as for the ECB, which is gearing up. In late
December the ECB delivered an update of its support
package, which is supposed to run well into 2022. The
14

Direct lending falls outside the scope of the ECB mandate.

15

This was clearly against the will of the Fed.

Pandemic Emergency Purchase Program (PEPP), the vehicle
for quantitative easing, was increased by EUR 500 billion to
EUR 1.85 trillion and extended until March 2022.16 In
addition, the bank announced full reinvestment of expiring
assets on its balance sheet until end 2023. The other main legof its policy, the Targeted Long Term Refinancing Operations(TLTROs) is directed at banks, crucial financing vehicles inthe Eurozone. It was also reinforced by providing morefavourable terms and conditions and includes an extension
as well, until June 2022. Banks get 1% paid on their TLTROs
until that date. We are convinced higher gears will be sought
if needed.
1.8 Persistently low inflation rates

inflation will be slightly higher on the other side of theAtlantic. Inflation rates are expected to remain muted.
Box 2 Low inflation forecast is justified?
Is our rather conservative baseline inflation forecast reallyjustified? The main argument of those fearing higher
inflation, is that not only demand is affected by the crisis,
but supply as well. If supply is significantly scarred, due toe.g. business insolvencies and eroded skill sets of workers, a
pickup of demand will lead to pressure on a smaller supply
side. That is a fairly standard recipe for inflation. But wethink that this is not likely under the baseline scenario of adecent recovery and - as we see it - limited scarring to the
supply side. The problem of the past decennium has been ashortage of demand, reflecting in persistently low inflation.
That lack of demand is now exaggerated by the crisis.
Demand recovery then seems to have to go a long way
before hitting the supply boundary, even if some scarring
thereof has occurred. Still, inflation may temporarily peak
as pent up demand allows firms in e.g. the services sector toraise prices.

1.10 Yields continue to decline

1.9 Stock markets have veered up again

1.11 Yields even low in periphery countries

Judging against the main target of monetary policy, keeping
inflation at a decent level (of 2%),17 the efforts of the central
banks look like uphill battles. Since the Great Financial Crisisof 2008 inflation rates have been persistently low andflirting with deflation now and then during 2020 asaggregate demand dropped in the early months of the Covid19 crisis. We observed some recovery since, and we expect
inflation gradually picking up as the recovery gains traction.
Given the lower US output gap compared to the Eurozone,

As what is broadly considered a hint to more hawkish voices in
the governing board, a note was made that the program would
perhaps not be used in full.
16

creating policy room for central banks to cut interest rates, which
are nominal rates. A zero inflation rate would reduce that room,
most prominently in case of low real interest rates such as now.

Some inflation as a target seems at odds with price stability,
which is the ultimate target of monetary policy. But it allows
17

Atradius Economic Outlook – February 2021 | 10

This does not mean monetary policy efforts are lost. On thecontrary, they are dampening the impact of the crisis. In theabsence of such accommodative monetary policy, matterswould have been worse, arguably much worse. First, andforemost, it allows governments to borrow at low rates, oreven negative rates. Indeed, German current yields for 10year government bonds are at a negative rate of almost 0.5%.
Moreover, the yield differentials between debt loaded
Eurozone countries such as Italy and Germany has come off
to 0.5 ppt, far below levels seen before the Great Financial
Crisis. This allows even governments of those countries topursue an indispensable expansionary fiscal policy tocounter the crisis.18 Second, part of the money pumped into
the system goes to the equity markets. This has not remained
without an impact either. In fact, the US S&P 500 has
climbed to record highs, after falling from a cliff in Spring.
The Emerging markets MSCI has surpassed its early 2018
peak level. Only the Eurozone STOXX 50 has, though it hasveered up, has remained below pre pandemic levels. Higher
equity prices strongly correlate with the expectations about
economic recovery and as such support consumption
through wealth effects, especially in the US. Third, firm
finance is alleviated. The Fed stepped in during Spring 2020
when there were hick ups in the money market during theSpring, keeping short term financing afloat. More
importantly perhaps, in the Eurozone, the banking system isfacilitated to play its crucial role in financing the recovery.
Tightening of credit conditions and higher rates, which seem
natural in a downturn let alone crisis of this kind, areavoided or at least dampened. Monetary policy, therefore, isindispensable and should not only be assessed on the basisof inflation targets.

Government spending remains
criticalAs said, accommodative monetary policy is necessary it is
not sufficient, but necessary. The other leg to keep economies
afloat is fiscal policy. We have long argued for fiscal policy to
be stepped up underpinning lacklustre pre pandemic
demand and lead the energy transition.19 The process was
slow, very slow, and held back by concerns about publicfinance, particularly high government debt levels. The
pandemic has changed all that. Indeed, governments havegone into massive spending. Whereas in Spring an estimated
USD 7.8 trillion stimulus was committed globally, almost 9%
of global GDP, with a focus on the first phase of thepandemic. Later in 2020 this amount had already gone up to
USD 11.7 trillion, or 12% of GDP and it still rising as infections
have gone up again after the summer.
Such spending is inevitable. As the pandemic develops, there
is a surge in healthcare spending as hospitalisations go up,
just like demand for medicine and - of course - developmentof a vaccine needs funding, just like the vaccination rollout.
Moreover, social distancing measures such as lockdowns
18

At, indeed, no interest cost in the current market circumstances.

11 | Atradius Economic Outlook – February 2021

imply significant economic costs that the pandemic as suchcreates. Insolvency, and even bankruptcy, threaten firms,
workers face unemployment. Monetary policy can help, but
lowering rates and buying government assets is simply notdirectly helping these firms and workers: governments needto step in. Wage subsidies to preserve jobs andunemployment benefits are in need for those who have losttheir jobs. Just like deferring tax collection, providing
subsidised loans and loan guarantees to firms to alleviateliquidity pressure. In this way, the pandemic, andparticularly the public health interventions related to it,
simply push fiscal policy to the frontline.
Fiscal policy support should certainly be there during theoutbreak phase of the pandemic. After that, when infection
rates start to decline, only a gradual retreat is desirable.
Public confidence is to be rebuilt, and uncertainty reduced toget businesses and households spending again. Liquidity
support for businesses can be reduced, but only gradually. .
Dampening the expected wave of default of firms requires
solvency reinforcement measures, including equity
participations. Finally, as the pandemic is under control, thegovernment case seize the opportunity to guide thetransformation of the economy, in the direction of it desires,such as more climate friendly policies and digitalisation.
With this in mind, one can see government intervention will
be required for some time to come. This is what we see
happening under our baseline.
After a set of interventions that we have documented in our
May Outlook, the renewed surge of the virus has triggered
further - substantial - fiscal responses. In the US, which isparticularly hard hit with 400k deaths, the Trumpadministration already followed up on the USD 2.3 trillion
Cares Act spending of the Spring (and a number of less eye
catching initiatives) by signing a USD 877 billion (4.5% ofGDP) relief package last December. This predominantly
contains enhanced employment benefits and direct stimulus
payments of USD 600 per individual. Early January, theBiden administration put in its bid by announcing an
additional USD 1.9 trillion package (9% of GDP). It aims at
providing households with an additional USD 1400 per
individual of assistance (total value of USD 1 trillion). The
rest of the package contains spending on vaccinations and(safe) school reopening and aid for local and state
governments as well as businesses. This is still only thenrelief part of the package. Another Biden administration
program to rebuild the economy, targeting sustainable andequitable recovery is the next step.
Most Eurozone countries, such as Germany, France, Italy andSpain are now facing a resurgence of new Covid-19 cases andhave extended existing stimulus programs well into 2021.
For the economic recovery phase, which we think will reallytake-off mid-2021, these countries will also be able to benefit
from significantly stepped up EU facilities. In December the
EU hammered off a Pandemic Recovery Fund valued at EUR
390 billion in grants and EUR 360 billion in loans (together
about 7% of GDP), which will mostly be committed from19

Such as in Time to Act, Atradius Economic Outlook May 2019.

2021-2023 (70% of grants during 2021 and 2022). Funds will
be distributed based on plans submitted by the EU countries
and will be steered towards climate related and digitisation
investments. High-debt and hard pandemic hit countries
such as Italy and Spain will be the largest beneficiaries.
Moreover, the EU has provided for a package of EUR 450
billion (4% of GDP) to provide Pandemic Crisis Support tocountries for healthcare related spending, protection ofworkers and jobs as well as businesses. Finally, the EU
budget (for 2021-2027) itself also contains allocations to copewith the pandemic. The EU, therefore, looks set for the
support of the recovery phase and providing guidance fortransforming the economy.

deficits reflected how much debt levels have shot up. The US
added more than 20 ppt to the debt ratio and has now
reached a level of more than 150% of GDP, closely tracking
Italy and France.

Fiscal spending of emerging economies has not changed
much since the May Outlook. The overall picture is that
stimulus measures are generally much more modest: China
4.7% of GDP targeted at infrastructure and funding of state
own entities and India 3.2% of GDP. Only Brazil, also hard hit
by the pandemic, stands out with spending up to 12% of GDP
in 2020, a really significant figure given the limited GDP
shrink in 2020 (4.5%).

High government deficits and debt-to-GDP levels generally
raise concerns for sustainability of public finances.
Remarkably, even the IMF and the European Union, accept
the current situation, and encourage governments tocontinue supporting their economies. There are two reasonsfor this. First, government spending is inevitable to keep the
economy afloat and prepare it for the future as argued in thisoutlook. Doing nothing is simply no option. Second, central
banks have created such an extremely accommodative
monetary environment where the interest rates are
extremely low, or even negative and money is abundant.
Most importantly, central banks such as the Fed and ECB will
act as lenders of last resort for governments by means of
their asset purchase programs. For these reasons,sustainability is currently not an issue.

1.12 Fiscal balances deteriorate

1.13 Government debt jumped

In 2021 as the recovery firms, spending will diminish and
GDP will go up, triggering a reversal of what we have seen in
2020: significantly lower deficits. Still, with government
spending higher than before the pandemic and GDP levels
lower, a return to 2019 deficit levels is not on the cards forthe foreseeable future, except in China. Still, with resumptionof GDP growth and continued low interest cost, the debt to
GDP levels will generally stabilise – in many cases at muchhigher levels than before the pandemic.

This means government interventions are indeed not freelunches. One day, not in the forecast horizon, central banks
will tighten. This will put government finances underpressure and will require government revenue increases,that is to say tax income, to alleviate this. This can be spreadover a long period of time. But at the end of the day future
generations, will bear the brunt of current government
spending.

Risk of delayed recovery
The picture we have sketched is not deterministic, it is thebaseline of a number of scenarios. We therefore wish to pointat an alternative scenario, which is less benign, but stillrealistic in view of the current circumstances. That is one
where a very significant hit to the global economy occurs
during the first half of 2021.

The unprecedented fiscal response is obviously not for free.
In 2020 government spending, coupled with sharp declines
in GDP have raised deficits and public debt levels, the latterreaching 100% of GDP, the highest level ever. Deficits in theadvanced economies soared, especially in Italy, Spain, theUK and the US with 2020 GDP deficits in the latter two
countries exceeding 15%. The emerging economies were
somewhat more restrained, especially China. Brazil,
however saw the 2020 deficit ballooning to 17%. These

What we see in such a scenario is a stretched wave of global
infections, of Covid-19 or its mutations such as B117 andassociated reintroduction of severe and long lasting
lockdowns, including manufacturing restrictions, with an
impact similar to the Spring of 2020. Medical advances areavailable, as they currently are, but are insufficiently rolled
out during the first half of 2021 to prevent the ongoingstriking of the pandemic to hit and damage the economy. It issimply Spring 2020 revisited. Monetary authorities react byfurther loosening and governments continue to standby tohelp businesses and workers survive the bad state of theworld. H1 GDP takes another severe hit and the supply side
Atradius Economic Outlook – February 2021 | 12

scarring is aggravated. Public finances worsen further.
Financial markets fall, as in 2020, as uncertainty mounts
again and only gradually recover. This eats particularly into
consumption levels, especially in the US.
The recovery is not long second leg V shaped but rather W
shaped as the 2020Q3 recovery is followed by anotherrecession in H12021. In this scenario though, recovery will
occur, but is postponed six months compared to the baseline,to H2 2021. It implies higher levels of scarring, insolvencies
and unemployment, in the global economy. While there is astrong global recovery in H2 of 2021, GDP growth in the fullyear 2021 will only be marginal, especially in the US, theEurozone and Latin America. This is poor if one considers thebase effect: 2020 was a year of GDP contraction. Real
recovery only come in 2022.

13 | Atradius Economic Outlook – February 2021

This Delayed Recovery scenario, indeed, is the one with thehighest probability, after the baseline.
Table 1.2 Real GDP growth (%) - two scenarios
BaselineEurozone
United States
Emerging Asia
Latin America
Eastern Europe
World

Delayed recovery

2020

2021

2022

2020

2021

2022

-7.1
-3.5
-1.2
-6.7
-3.8
-3.9

4.2
4.2
6.4
5.4
2.9
5.0

4.9
3.4
4.6
3.2
4.5
4.3

-7.1
-3.5
-1.2
-6.7
-3.8
-3.9

2.5
2.9
4.8
4.4
1.6
3.6

4.7
3.1
4.5
3.1
4.5
4.1

Sources: Oxford Economics, Atradius2. Developments in major economies
Table 2.2 Real GDP growth (%) - eurozone

Advanced economies
Growth in the advanced economies is projected to strengthen
to 3.9%, leaving GDP some 1.0% below what it was in 2019.
Owing to the implementation of the fiscal relief bill, theUnited States is expected to regain most of the lost value in
GDP in 2021, but the costs to the economy in terms of
unemployment and bankruptcies remain high. Covid-19
continues to exert a high toll on the US economy and recent
civil unrest around the inauguration of president-elect Joe
Biden casts uncertainty over the economic outlook. The
Eurozone faces a more protracted recovery as many
economies continue to be in strict lockdowns. The outlook
will continue to be dominated by the evolution of thepandemic, the speed of the vaccine rollout and the size offiscal policy responses. Economic activity is not expected toreturn to its pre-crisis levels in 2021.
Table 2.1 Real GDP growth (%) - advanced markets

Eurozone
United States
United Kingdom
Japan
Advanced economies

2019

2020e

2021f

2022f

1.3
2.2
1.4
0.3
1.6

-7.1
-3.5
-10.3
-5.3
-5.0

4.2
4.2
4.5
2.7
3.9

4.9
3.4
6.4
2.4
3.9

Sources: Oxford Economics, Atradius

Partial recovery of Eurozone
economy
Despite the positive news about the development of multiple
vaccines, the Eurozone is still struggling with the Covid-19
virus. Infections have flared up again across Europe (Figure2.1). We estimate euro area GDP to have declined by 7.1% in
2020, the highest GDP contraction among the majoradvanced markets (with the exception of the United
Kingdom). A partial recovery of 4.2% is likely to occur in
2021 and only in 2022 is activity is expected to return to prepandemic levels.
Our baseline projection assumes a moderate long-term hit to
GDP from the pandemic. This ‘scarring’ effect is the result of
weaker capital accumulation, depressed labour supply anddisappointing productivity growth.

2019

2020e

2021f

2022f

1.4
1.7
1.5
0.6
1.6
5.9
0.3
1.6
2.2
2.0
1.3

-7.5
-7.1
-9.1
-5.3
-9.6
2.1
-9.0
-3.9
-8.3
-11.1
-7.1

3.0
3.8
5.1
3.8
2.7
2.4
4.5
2.7
4.4
6.3
4.2

5.5
5.8
5.6
4.5
11.3
3.1
4.5
3.0
6.6
5.9
4.9

Austria
Belgium
FranceGermany
GreeceIreland
Italy
Netherlands
PortugalSpain
Eurozone

Sources: Oxford Economics, Atradius

After an unprecedented rebound in GDP growth in Q3 of
2020, recovery is likely to stifle in Q4 and Q1 of 2021. This isowing to a tightening of lockdown measures, following arenewed rise of Covid-19 infections. Sentiment indicators
seem to be confirming this: the composite Purchasing
Managers Index (PMI) increased somewhat in December
2020, to 49.1, but remained below 50 (the dividing line
between growth and contraction of business activity). The
European Sentiment Indictor (ESI) has remained roughly at
the same level since September, with the latest score being
90.4 in December. This is still well below 100, the neutrallevel.
2.1 Covid-19 infections increased in fall 2020
Covid-19 confirmed cases, millions

14
12
10
8
6
4
2
0

France

Italy

Spain

Germany

Netherlands

Belgium
Other countries
Source: WHO, Atradius

Recovery of services exports lag behind
Due to the pandemic stimulated supply-constraints, borderclosures and restrictions on mobility resulted in a sudden
drop in world trade in 2020. This caused a strong 10.8%
contraction of Eurozone exports of goods and services in
2020. The impact was uneven across countries, depending
Atradius Economic Outlook – February 2021 | 14

2.2 Inflation drops faster than contract wages

Percent

on their sectoral specialisation, with Portugal, Spain, Greece,
Italy and France most severely hit due to the importance of
tourism for these countries. In 2021, growth of exports ofgoods and services is expected to recover by 7.8%. Supported
by pent-up demand, exports of goods are projected tooutperform those of services. The latter will be dampened bya slow normalisation in hospitality and transportation
services, negatively affecting the revival of tourism. For
most Eurozone countries, exports of goods and services do
not fully recover to their pre-pandemic levels in 2021.

Spending opportunities likely to improve
Private consumption was heavily disrupted by the
lockdowns in Q2 of 2020. After a recovery in the third
quarter, when many restrictions were lifted, there will again
be a setback in the fourth quarter amid a resurgence of
infections and stricter measures. All in all, private
consumption is forecast to have shrunk by 8.1% in 2020. This
will be followed by only a partial rebound in 2021 (3.9%).
Spending opportunities are likely to improve throughout thisyear as lockdowns are lifted and more retail purchases are
made online.
The Covid-19 pandemic had a severe impact on the Eurozone
labour market. A net total of 5.8 million jobs were lost in thefirst half of the year, with a small rebound in Q3 of 2020 (netgain of 1.6 million). The unemployment rate climbed to 8.3%
in November 2020. While the unemployment rate has been
increasing, it is more than a percentage point lower thanwhat we expected during the previous Economic Outlook.
The relatively muted response by the labour market islargely due to the successful implementation of ambitious
policy measures in the member states, such as short-timework schemes, wage subsidies and other measures tosupplement incomes.
A significant amount of labour market slack has
accumulated since March, which is the result of hours
worked declining at a faster rate than the number of
employees. Unemployment is likely to rise to an average of
9.1% in 2021. There is a risk that the Covid-19 crisis could
leave deeper and longer-lasting scars on the labour market.
These include employees who may not be able to return totheir jobs and are out of employment for a long time.
Moreover, skills gaps could hinder occupational mobility.

Government debt rises on fiscal spending
Extensive measures have been taken to contain themacroeconomic fallout of the Covid-19 crisis. The bulk of
measures are taken at the national level. Governments are
implementing direct fiscal stimulus measures as well as
indirect measures to support companies. The level of support
varies per country, with Northern Europe giving generally
more generous direct fiscal support than Southern Europe,
whose fiscal space is more restrained. As a result of thepandemic-related measures, the fiscal deficits deteriorated
and government debt jumped across the Eurozone in 2020.
Deficits will be gradually reduced over the coming years, as
the pandemic related measures are unwound and economic
activity increases. Nevertheless, debt levels will remain
elevated in the near term, potentially creating debt
sustainability issues if interest rates were to rise.
2.3 Government debt remains elevated

Percent

The growth of contractual wages has been sliding in theEurozone, but the decrease in inflation was much stronger(Figure 2.2). Amid the decline of employment, this provides
at least some relief to consumers’ spending power.

A significant drop in energy prices pushed the headline
inflation into negative territory since August 2020. Core
inflation, which excludes energy and food prices, also fell
considerably during the summer, on the back of lower pricesof services (especially tourism related), but also industrial
goods. In 2021 inflation is likely to remain subdued (1.2%).
The oil price is likely to stabilise and will no longer exert anegative effect on inflation. However, core inflation willremain low, owing to weak demand and labour market slack,as well as the recent appreciation of the euro that keeps
import prices low.

Besides the national measures, there is also a EUR 750
billion EU recovery plan called ‘Next Generation EU’ (NGEU).
This common recovery scheme consists of loans, grants and

15 | Atradius Economic Outlook – February 2021

guarantees, to be distributed to member states until the endof 2026. The novelty of NGEU is that it is the first sizablecommon European debt issuance and debt service isfinanced directly from the EU budget. Therefore, the NGEU
does not raise national debt levels.

United States: virus out of control,
policy risks to the upside
One year on from the first domestic death confirmed fromthe virus, the US enters 2021 on weak footing. The virus
poses serious downside risks to the 2021 outlook –particularly in case numbers and the outbreak of a moretransmissible strain – but economic growth is expected torebound as the rollout of the vaccination allows economic
life to slowly pick back up and the new administration takes
a more predictable and conventional approach topolicymaking.
As the health crisis rages on, the recovery in the labour
market has lost momentum. Unemployment peaked at 14.8%
in April 2020 as a result of Covid-19 containment measuresand has improved significantly since, closing the year at 6.7%
- a rate last seen in Q1 2014. The pace of improvement
however has been decelerating as the colder weather
brought more people indoors, the virus spread more rapidly,
and more stay-at-home orders were implemented. As aresult, initial jobless claims have been ticking back up –reaching 965,000 in the first week of 2021, far surpassing
the peak of 665,000 during the global financial crisis.
2.4 US unemployment and earnings

Against this backdrop, President Biden took office inJanuary and immediately took steps to get the coronavirus
under control and support the economic recovery. Afterbeing sworn in, Biden took several executive actions toaddress the pandemic more aggressively, such as requiring
masks in public transportation, increasing testing, andaccelerating the pace of vaccination. Following the USD 900
billion stimulus passed in December 2020, Biden iscommitted to implementing another USD 1.9 trillion
stimulus, the American Rescue Plan. This will provide more
direct financial support to US businesses and families,
helping sustain the economy through the winter. With only aslim majority in the Senate, we expect some compromises tobe made bringing the total value of Biden’s stimulus plan
lower.
On top of expansionary fiscal policy, the Federal Reserve isalso in a highly accommodative position. We do not expect tosee any tightening of the policy rate until 2023 andquantitative easing purchasing is expected to continue
throughout the year, to support the labour market andensure a sustainable economic recovery and pace of
inflation. With so much economic support, there is a risk ofoverheating and a sharp burst in inflation in the summer but
we expect it to be only transitory.
The health crisis is expected to dominate economic results in
H1 but as herd immunity is reached, the weather improves,and economic life returns to normalcy, the policies of the
new administration will have a greater impact. As Democrats
have taken control of the Senate, winning the two seats in
Georgia’s runoff races in January, policy risks under
President Biden are tilted to the upside. Policy priorities
include raising the federal minimum wage and significantly
ramping up investment in green energy. The newadministration has also been taking steps to mend America’s
reputation and leadership in international relations, forinstance, by re-joining the global climate accord. Some ofthese shifts may negatively impact businesses in the longer
run, but for now, it will be offset by the prioritisation of fiscal
and monetary support.

UK recovery to begin in Q2

We expect the labour market to remain in dire straits untilthe virus is brought under control. Layoffs are especiallysevere in the entertainment and hospitality sectors whichbear the brunt of the lockdown orders, but the impacts arefelt across the economy. More than 9.8 million jobs havebeen lost since Covid-19 arrived and long-term
unemployment is increasing. This is having a negative
impact on consumption, driving consumer spending, themain driver of the US economy, into the red in the final
months of 2020. Private finances are also deteriorating –household debt is rising for the first time since 2009 – posing
a serious risk for a prolonged downturn.

The United Kingdom’s recovery diverges from that of theUnited States. While the US is expected to recuperate the GDP
losses of 2020 by the end of this year, the UK’s expected 4.5%
expansion will only cover about half of the losses from thepandemic. The 2021 outlook for the UK is weaker thanpreviously expected due to the introduction of a third
national lockdown in response to a steep rise in Covid-19
cases associated with the more transmissible variant of thevirus spreading since December.
The economic consequences of the latest lockdown will not
be as dire as those of the first one last year. The starting pointof Q4 2020 is much lower, but also the restrictions are lessstringent and consumers and businesses have adapted moreto the exceptional environment. With the vaccine being
aggressively rolled out, already with about 10% of the
population vaccinated, we expect to see relaxation of the
Atradius Economic Outlook – February 2021 | 16

social distancing measures in Q2, allowing for a rebound in
GDP growth through the rest of the year.
Uncertainty surrounding the path of the virus may bring2021 GDP growth lower than currently forecast, but the factthat the UK and EU managed to reach a deal on a free-trade
agreement reduces the other key downside risk. The FTA
provides tariff-free bilateral trade in goods but does notcover services, which account for 80% of the UK economy
and 45% of the country’s external trade. It also introduces
non-tariff barriers in the form of customs bureaucracy andsome regulatory barriers. The new frictions to trade will
have a sizeable negative impact on the UK economy. The UK
Office for Budget Responsibility estimates that they will cost
about 5% of lost GDP growth over the coming 15 years. In the
short term though, it bodes well for GDP growth, namely inthe better outlook for business investment which is expected
to climb expand 4.7% this year after a 15.6% contraction in
2020.
Monetary and fiscal policy also continue to provide strong
support for the UK’s economic outlook. The Bank of England
will supplement ultra-low interest rates with a GBP 150
billion asset-purchasing programme running through to
December 2021. The policy rate is not expected to be liftedfrom 0.10% over the forecast period. On the fiscal side,
government spending has been surging to support theeconomy, namely through the Job Retention and Self
Employment Income Support schemes. With additional
grants made available to firms to offset the negative
economic effects of the third lockdown, total fiscal support in
response to the Covid-19 crisis in FY 2020-21 is 14% of GDP.
The government taps are expected to stay open as thegovernment revised its FY 2021-22 fiscal outlook to be more
accommodative and additional support may already beannounced in the Budget in March.

Japan: Tokyo Olympics likely toboost economy
The Covid-19 pandemic triggered a major recession in Japanin the first half of 2020. As the infections were brought
under control, restrictions could be eased over the summerof last year. In 2020 GDP dropped by an estimated 5.4%. Thisis more limited than in most other advanced markets,
signalling the effectiveness of the coronavirus response. In
2021 there is likely to be a partial recovery. The recovery of
trading partners is set to support exports, whereas weak
income growth is likely to hold back private consumption.
Assuming the Tokyo Olympics will go ahead in summer
2021, this will provide a temporary boost to GDP. The boostof the Olympics to GDP will be less than anticipated before
the pandemic, as the number of spectators will not be as highas thought before.
Japanese exports took a big hit in the first half of 2020 due
to the disruptive effect of Covid-19, but there was a robust
recovery after the summer. Japan is well-integrated in Asian
supply chains, importing raw materials and inputs from theregion, and producing goods at the high-end of the value
chain. Exports are expected to continue to normalize

17 | Atradius Economic Outlook – February 2021

alongside global activity, but recovery will be partial as
many of Japan’s major trading partners continue to struggle
with a renewed rise of infections.
On the domestic side, consumption spending remains
relatively weak after pandemic-related disruptions and theconsumption tax hike in 2019. There are some cautious
positive signs. Retail and car sales recovered to prepandemic levels and consumer sentiment is picking up.
However, the services PMI remains weak at 47.8 in
November 2020 (the neutral level is 50). Due to government
subsidies for firms and employees, the unemployment rate
has barely risen. But we do expect a further upward trend in
unemployment and wage growth will remain weak. This
prevents a strong recovery of private consumption in 2021
even though there will be a temporary boost to consumption
from the Tokyo Olympics.
Private investment also recovered in the second half of2020, driven by rising investment in IT and automation,reflecting the recent increased use of modern technologies at
the workplace to boost productivity.
Since the onset of the pandemic, the government haslaunched several supplementary budgets, with a wide rangeof measures to protect households and businesses. These
include cash handouts of JPY 100,000 to every resident, cashtransfer to affected businesses, expansion of work subsidies
and rent subsidies to heavily affected companies. Moreover,concessional loans and guarantees are given to affectedcompanies through public and private financial institutions.
The fiscal relief packages are worth more than 11% of GDP,
while indirect measures such as loan guarantees amount toanother 24% of GDP.

Emerging economies
Many emerging market economies (EMEs) are still at a
critical stage in the health crisis, though there are large
differences between countries and regions. Asia is head of
the curve in controlling the number of Covid-19 infections,with Latin America being worst off. There was a sharp
downward effect in 2020 on domestic demand from thelockdowns and an indirect negative effect from world trade.
The decline in oil prices and tourism income had a negative
impact on countries dependent on those sectors. Emerging
markets as a group are forecast to grow by 6.3% in 2021,
following a 1.9% contraction in 2020.
Table 2.3 Real GDP growth (%) - emerging markets
2019

2020e

2021f

Emerging Asia

5.1

-0.3

7.4

2022f
5.1

Latin America

0.7

-7.1

5.4

3.1

Eastern Europe

2.5

-2.8

3.2

4.4

MENA

0.7

-6.5

3.5

4.4

Sub-Saharan Africa

2.6

-3.8

3.4

4.0

Emerging Markets

3.9

-1.9

6.3

4.8

Sources: Oxford Economics, Atradius

Asia: China and India
Asian markets are performing comparatively well in keeping
the virus under control. China, where the virus first emerged,
is ahead of the epidemic curve. In early 2020, the authorities
imposed strict containment measures, including the
lockdown of Hubei province, large-scale mobility restrictions
at the national level, and social distancing. While new Covid19 cases have reappeared sporadically, the virus outbreakseems largely under control in most of the country. GDP
experienced a 6.8% year-on-year fall in Q1 of 2020, but
rebounded strongly in the second quarter, and kept strong in
the third and fourth quarter. Monetary policy and fiscal
stimulus helped to contain the economic fallout, but as the
economy is gaining momentum, both are scaled down. Thereis also a need to keep fiscal spending in check, given the highlevel of government debt on all governmental levels
combined and off-budget activities.
The outlook for India is considerably weaker. The Indian
economy shrank by almost 25% in Q2 of 2020, and anothersizable contraction of 7% followed in Q3. Sporadic shutdowns
occur across the country, while meagre fiscal support andpressures on corporate balance sheets and banking sector
bad loans, restrain the pace of the upturn. There is somescope for lower policy interest rates, once inflation subsides.
In 2021, we project a sharp 10.2% increase in India´s GDP
from a 7.6% contraction in 2020. After 2021, GDP growth will
return to more sustainable levels.

Latin America: Brazil and Mexico
Countries in Latin America remain severely affected by the
pandemic and the government response is often slow orineffective. The larger Latin American countries, Mexico,
Brazil and Argentina, together have recorded 11.8 million
cases, or about 13% of global cases (while representing 5% of
the world population. Compared to the size of the population,
Brazil and Argentina are among the countries with thehighest infection rates in the world. Latin America witnesseda sharp GDP contraction of 7.6% in 2020, which is forecast to
be followed by a partial rebound in 2012 (5.4%).
Brazil, in February 2020, was the first Latin Americancountry to get Covid-19. Rapidly spreading infections are aheavy burden on Brazil’s health care system. The economy,
while in recession in 2020, is better able to cope with theshock from Covid-19 than many other countries in theregion. The economy is relatively diversified, with a lower
share of informality on the labour market and more
possibilities to work remotely. Furthermore, the government
provided a sizable fiscal package (12% of GDP) to contain theeconomic damage. GDP shrank by 4.7% in 2020, less than inneighbouring countries, and GDP is expected to show arobust recovery in 2021.
Mexico witnessed a deep recession in 2020, with a GDP
contraction of 8.7%, driven by steep declines in consumption
and investment. The automobile sector, Mexico’s leading
source of exports, suffered from a sharp fall in external
demand and severe supply-chain disruptions. Unlike Brazil,

Mexico’s fiscal support was meagre, amounting to just 1% ofGDP. Monetary policy is less loose than in other major
emerging markets. As a result, the recovery will be
protracted and GDP will only return to its pre-pandemic levelin 2024. In 2021, GDP will partially rebound and expand by
6.1%. Exports of the manufacturing sector will receive a boost
from higher US growth prospects, while an infrastructure
plan will contribute to a partial recovery of investment.

Eastern Europe: Russia and Turkey
Eastern Europe is likely to see a 3.2% expansion of GDP in
2021, following a 2.8% decline in 2020. Russia, like manyother commodity-based emerging markets, was hit by a
combination of low oil prices and the negative effect of local
lockdowns on domestic demand. But as the lockdown
measures in Russia were shorter and less severe, therecession was relatively mild (GDP declined by 3.6%).
Government support in 2020 consisted of social benefits forhouseholds and financial support for companies. The fiscal
package is estimated to be 3.5% of GDP. Despite the projectedpartial rebound in GDP in 2021, the outlook for the economy
is bleak. The government will largely roll back its fiscal
stimulus this year, as it prioritises preserving fiscal buffers
as a safeguard against external shocks. Private consumption
growth will remain constrained. A rise in Covid-19 infections
is leading to self-imposed social distancing, while social
benefits and other subsidies to households are being scaled
back. A weak oil market is another factor holding backpotential growth. While the oil price will move up somewhat
in 2021 compared to 2020, Russia has committed to
production cuts under the OPEC+ deal, keeping export
earnings from oil constrained.
Turkey managed to contain the number of Covid-19 cases in
April and May, but they have grown again after therelaxation of the confinement measures in June. The Turkish
economy was able to avoid recession in 2020. While activity
showed a sharp fall in Q2 of 2020, this was followed by astrong rebound in Q3, driven by a major easing in monetary
policy, fiscal stimulus, and a strong credit push. The recovery
will be protracted, however, as rising infections necessitate
new restrictions and stimulus measures are being rolled
back. Investment will be affected by persisting uncertainties.
High household debt levels and a modest coverage of formalsocial safety nets weigh on private consumption. While someof the recent policy changes are for the better, Turkey has apoor track record in policy consistency and often resorts tostop-go policies. These continue to weigh on the growth
outlook.

Sub-Saharan Africa: South Africa
In Sub-Saharan Africa, many countries faced severe
downturns in 2020. Although a health crisis has been
averted, the toll of the domestic and international measureson economies and societies have been large. South Africa,
the region’s second-largest and most advanced economy, isleading in terms of official Covid-19 registrations. In the
Atradius Economic Outlook – February 2021 | 18

early stages of the pandemic, it introduced one of thestrictest lockdowns in the world. Since then it experienced
two waves of infections, between July and August and onethat has been ongoing since early December, both linked to arelaxation of containment measures. During the latest wave,
President Cyril Ramaphosa resisted the urge to introduce
strict nationwide restrictions. Instead, he is using a more
localized approach of tightening restrictions in hotspots withhigh infections.
South Africa suffered a deep and painful recession in 2020
because of the pandemic. The recession wiped out several
years of economic expansion and job creation. Growth will
resume in 2021, but the pace of recovery will be held back by
several domestic constraints, including the removal of atemporary fiscal stimulus and the lasting damage to thelabour market. The most affected sectors, recreation,

19 | Atradius Economic Outlook – February 2021

entertainment and tourism, will have some scope forrecovery, but activity remains well below pre-pandemic
levels. The government also faces the pressing issue of
having to bring public finances in order, as a failure tostabilise public debt could trigger financial market
turbulence and adversely affect foreign capital inflows.

Appendix: forecast tables
Table A1: Macroeconomic headline figures - developed markets
GDP growth
Inflation
Budget balance(% change p.a.) (% change p.a.)(% of GDP)Grossgovernment
debt (% of GDP)

Current
account(% of GDP)

Export growth Private cons.
(% change p.a.) (% change p.a.)

Fixed
Government
Retail sales Industrial prod.
investment
consumption(% change p.a.) (% change p.a.)(% change p.a.) (% change p.a.)2020 2021 2022 2020 2021 2022 2020 2021 2022 2020 2021 2022 2020 2021 2022 2020 2021 2022 2020 2021 2022 2020 2021 2022 2020 2021 2022 2020 2021 2022 2020 2021 2022

Australia

-2.8

3.1

3.0

0.7

0.7

0.9

-10.9

-6.0

-4.5

67.6

72.4

75.1

2.3

0.5

-1.0

-10.0

2.2

7.1

-6.2

4.9

4.3

-4.5

2.5

6.0

7.2

1.4

-0.1

2.2

2.2

2.0

-0.5

1.9

3.9

Austria

-7.5

3.0

5.5

1.4

1.3

1.7

-10.3

-9.4

-3.7

146.7

149.3

143.2

3.1

3.9

3.8

-11.6

6.1

7.7

-8.8

4.6

6.7

-5.3

3.0

6.0

0.7

2.0

2.1

-0.6

1.5

3.4

-6.3

4.2

2.8

Belgium

-7.1

4.1

5.8

0.7

1.9

1.8

-9.1

-6.9

-4.5

139.0

139.4

133.8

-1.2

-1.7

-1.5

-6.4

5.7

8.5

-8.0

5.1

4.6

-12.8

4.3

10.0

-2.0

6.3

3.9

-0.2

2.8

4.9

-5.2

3.0

4.2

Canada

-5.5

4.0

4.0

0.8

1.8

2.0

-10.5

-7.1

-1.8

119.4

118.6

113.3

-1.7

-1.7

-1.6

-10.1

4.8

5.9

-6.2

5.0

5.6

-4.2

1.2

4.9

0.2

3.4

-1.2

-1.7

9.0

5.6

-8.8

5.4

6.3

Denmark

-4.2

1.9

3.3

0.4

1.0

1.1

-4.7

-3.6

-1.3

57.7

60.0

58.6

7.0

5.8

5.6

-8.6

1.9

3.6

-3.8

3.3

3.3

0.3

2.1

2.8

-1.2

2.0

2.2

3.9

2.2

1.1

-6.0

3.2

5.0

Finland

-3.2

2.0

2.3

0.3

1.1

1.2

-5.5

-4.8

-2.4

72.4

76.2

75.9

-1.3

-0.8

-0.4

-10.5

0.0

3.8

-4.0

1.6

2.5

-2.6

1.0

2.8

0.0

1.7

1.6

3.6

1.1

0.9

-3.2

1.5

2.7

France

-9.1

5.1

5.6

0.5

1.1

1.6

-9.3

-8.6

-6.2

161.7

162.4

157.7

-2.5

-1.7

-0.9

-17.5

8.6

11.1

-7.5

4.0

3.7

-11.2

7.6

8.3

-3.9

5.3

2.6

-3.4

4.3

2.6

-10.4

7.7

3.6

Germany

-5.3

3.8

4.5

0.5

1.8

1.5

-5.0

-4.6

-0.8

67.8

68.8

64.6

6.6

6.1

5.6

-11.2

8.7

7.0

-6.6

2.6

7.9

-3.5

4.2

2.9

3.9

0.7

0.6

4.2

1.1

1.5

-10.3

8.1

3.8

Greece

-9.6

2.7

11.3

-1.3

0.8

1.9

-8.5

-4.9

-3.1

253.8

247.4

223.1 -8.4

-13.0

-8.3

-29.6

7.0

30.1

-3.2

4.4

4.3

0.8

12.2

19.2

2.2

3.0

2.1

-4.1

3.2

4.3

-3.2

5.5

7.0

Hong Kong

-5.9

4.7

3.7

0.4

2.1

2.5

-9.7

-5.2

-3.3

0.3

0.5

0.8

7.9

4.9

3.3

-6.3

8.8

3.9

-10.2

5.2

5.4

-13.0

8.5

8.1

7.5

0.5

0.8

-24.8

20.9

5.5

-6.1

1.1

3.7

Ireland

2.1

2.4

3.1

-0.4

1.5

2.5

-6.1

-5.2

-3.0

53.8

56.2

56.1

6.9

16.9

15.1

4.4

5.2

2.4

-11.0

2.6

7.5

-36.6

-32.1

7.9

9.0

3.7

2.0

-1.2

5.0

7.5

1.7

3.2

2.9

Italy

-9.0

4.5

4.5

-0.1

0.6

0.9

-11.2

-7.5

-4.7

181.0

180.0

175.5

3.5

2.9

3.1

-15.1

11.5

8.7

-10.2

4.4

4.6

-8.2

8.3

3.5

-0.6

1.3

0.9

-6.8

6.3

0.9

-10.8

10.7

3.3

Japan

-5.1

2.4

2.4

0.0

-0.4

0.3

-12.7

-10.5

-6.1

244.9 250.8

251.7

3.0

4.2

4.1

-12.6

11.1

5.8

-6.0

2.1

2.2

-4.8

0.4

3.1

2.2

1.8

0.5

-3.7

2.1

0.8

-10.3

5.6

3.4

Luxembourg

-3.7

4.5

6.1

0.8

1.1

1.3

-2.6

-1.9

0.8

25.0

25.5

22.7

3.9

5.3

5.4

-1.6

3.3

6.8

-9.8

7.8

7.1

-14.0

9.0

5.5

4.6

1.3

1.0

-0.7

15.1

5.7

-11.4

4.1

3.8

Netherlands

-3.9

2.7

3.0

1.3

1.5

1.7

-6.5

-5.7

-3.1

70.2

73.0

72.7

7.9

9.0

10.0

-4.2

5.4

4.5

-6.6

2.7

3.5

-3.6

3.2

4.1

0.9

2.7

-1.6

3.7

4.4

2.8

-3.9

2.8

2.7

New Zealand

-1.3

3.0

1.9

1.7

1.5

2.0

-9.6

-6.9

-3.3

41.7

35.2

35.7

-0.5

-1.9

-1.8

-12.0

3.4

13.4

-2.2

3.9

2.2

-8.0

9.7

5.2

5.0

-1.4

0.6

-0.5

6.5

2.3

-3.9

3.7

2.3

Norway

-1.6

2.2

2.5

1.3

2.4

2.0

2.2

0.0

1.6

54.0

57.6

59.3

2.5

3.1

3.8

-1.2

5.2

3.5

-7.9

3.5

2.5

-4.5

1.2

2.2

1.3

3.3

2.7

7.7

3.1

0.7

4.1

0.1

3.6

Portugal

-8.3

4.4

6.6

0.0

0.4

1.4

-7.5

-5.6

-3.3

152.6

150.5

142.3

-1.4

-0.3

1.1

-20.0

16.7

9.6

-6.5

4.0

5.4

-3.1

5.3

12.3

-0.7

3.7

3.0

-4.2

3.9

2.4

-7.2

4.3

3.2

Singapore

-5.8

5.6

4.1

-0.2

0.8

1.8

-6.7

-3.9

-1.2

152.6

143.2

135.8

16.9

17.7

17.5

-7.4

6.5

7.8

-13.0

12.4

5.2

-12.9

12.7

6.6

13.5

0.8

0.0

-15.8

17.3

4.5

7.0

3.7

2.7

Spain

-11.1

6.3

5.9

-0.3

1.2

1.1

-11.4

-8.3

-5.8

140.3

139.0

135.3

0.4

1.4

1.3

-21.0

8.0

10.6

-13.3

6.4

6.1

-11.8

8.5

8.6

3.7

2.9

1.4

-7.3

7.0

3.2

-9.5

8.3

2.5

South Korea

-1.1

2.9

3.2

0.5

1.3

1.8

-4.3

-3.6

-4.0

50.4

53.9

57.1

3.9

3.6

3.4

-3.2

5.3

4.0

-4.6

3.4

3.8

2.4

2.7

4.6

5.5

4.1

3.0

-0.1

3.4

3.8

0.2

4.7

2.6

Sweden

-3.0

2.9

3.0

0.5

1.2

1.6

-5.0

-3.6

-1.8

52.4

53.8

53.0

5.3

3.4

4.0

-6.2

2.5

3.3

-4.7

3.0

3.3

-1.7

3.8

2.5

-0.4

3.2

1.2

2.7

2.7

1.5

-4.7

4.2

1.8

Switzerland

-3.0

3.4

3.6

-0.7

0.3

0.5

-3.6

-2.6

-1.3

30.3

31.7

31.8

8.2

9.2

9.7

-4.8

4.6

7.1

-4.6

3.8

4.0

-3.1

3.3

3.6

1.9

1.5

0.0

1.0

-1.1

1.6

-4.2

5.5

4.9

United Kingdom

-10.0

5.4

5.8

0.9

1.3

1.8

-13.1

-12.7

-5.7

104.2

112.2

111.6

-3.4

-3.1

-3.2

-13.2

2.2

4.7

-11.9

5.9

5.9

-12.0

6.5

7.5

-7.8

9.1

6.7

0.3

4.9

1.4

-8.5

2.1

2.8

United States

-3.5

4.2

3.4

1.2

2.1

2.0

-15.7

-10.3

-6.5

161.5

162.5

160.4

-3.0

-3.3

-2.9

-13.1

5.1

8.4

-3.8

5.3

4.1

-1.3

3.4

2.4

0.5

-0.6

-0.6

1.2

5.2

2.0

-6.9

4.3

3.3

Eurozone

-7.1

4.2

4.9

0.2

1.2

1.4

-7.4

-6.3

-3.4

-

-

-

2.0

2.4

2.5

-10.7

7.8

7.5

-8.1

3.8

5.5

-9.2

4.2

5.8

0.6

2.7

1.4

-1.2

3.5

2.0

-8.7

7.5

3.7

Sources: Oxford Economics, Atradius

Atradius Economic Outlook – February 2021 | 20

Table A2: Macroeconomic headline figures - emerging markets
GDP growth(% change p.a.)

Inflation(% change p.a.)

Budget balance(% of GDP)

Gross government
debt (% of GDP)

Current account(% of GDP)

Export growth(% change p.a.)

Private cons.
(% change p.a.)Fixed investment(% change p.a.)

Government
consumption(% change p.a.)

Retail sales(% change p.a.)Industrial prod.
(% change p.a.)

2020

2021

2022

2020

2021

2022

2020

2021

2022

2020

2021

2022

2020

2021

2022

2020

2021

2022

2020

2021

2022

2020

2021

2022

2020

2021

2022

2020

2021

2022

2020

2021

China

2.1

8.1

5.0

2.4

2.0

2.9

-7.9

-6.3

-5.3

43.2

45.3

46.7

1.8

1.7

0.9

2.6

8.9

4.8

-3.3

13.6

7.5

5.4

4.8

3.4

7.2

5.5

4.0

-3.3

14.2

7.7

2.5

7.8

2022
4.1

India

-7.4

8.8

5.8

6.6

4.5

4.6

-6.9

-6.3

-5.3

57.7

56.2

55.1

1.5

0.4

0.8

-7.6

7.9

5.6

-9.1

11.3

5.2

-16.3

7.0

0.8

0.8

14.5

2.0

-7.4

13.2

6.8

-11.2

14.5

5.3

Indonesia

-2.2

4.7

7.0

2.0

2.0

2.6

-6.2

-6.3

-4.5

43.2

45.3

45.0

-0.7

-0.9

-1.9

-5.9

7.0

4.5

-2.7

3.6

8.1

-4.9

5.9

9.8

3.7

9.5

4.5

-12.0

5.5

24.4

-2.8

6.3

4.7

Malaysia

-5.8

5.0

6.8

-1.2

1.5

2.3

-7.3

-6.2

-4.4

63.6

65.8

62.9

4.6

2.1

1.8

-9.3

7.2

7.9

-4.6

5.5

6.8

-15.1

9.8

11.4

5.1

3.8

-0.5

-3.8

6.2

7.4

-4.5

6.1

4.6
5.4

Thailand

-6.4

4.3

5.9

-0.8

0.9

1.2

-5.9

-5.1

-3.7

46.0

45.2

43.6

4.4

3.6

6.7

-20.0

4.1

13.7

-1.3

3.7

3.9

-4.4

4.8

2.9

1.9

1.9

0.2

-11.4

3.7

3.9

-8.6

9.1

Argentina

-10.5

6.4

1.9

42.0

44.0

34.0

-9.2

-5.7

-3.6

109.6

99.8

93.6

1.4

1.8

1.2

-15.9

8.0

4.1

-13.1

7.5

2.2

-19.8

7.1

1.9

-4.3

2.9

1.7

-10.5

10.6

4.9

-8.8

5.7

1.7

Brazil

-4.7

3.8

2.5

3.4

4.9

3.6

-17.2

-9.2

-7.7

94.4

102.0

102.3

0.0

-1.1

-2.4

-1.2

5.0

5.0

-6.0

2.6

3.2

-5.0

5.4

5.6

-4.0

3.7

0.6

1.3

7.5

3.2

-5.6

8.3

3.4

Chile

-6.3

4.8

4.1

3.0

2.8

2.5

-8.6

-5.1

-2.7

36.9

40.3

41.0

0.3

-3.1

-2.8

-1.5

3.9

3.3

-8.2

5.9

4.4

-13.5

9.9

4.1

-3.1

7.9

3.3

-8.2

8.5

4.4

-1.4

3.2

3.5

Colombia

-7.2

6.8

5.1

2.5

2.0

2.9

-8.7

-5.0

-3.3

66.6

65.6

64.4

-3.9

-3.8

-4.1

-16.8

16.1

11.1

-6.6

4.9

4.3

-18.0

13.0

6.9

2.4

1.1

0.5

-

-

-

-7.1

4.3

4.7

Mexico

-8.7

5.6

3.8

3.4

3.4

3.3

-3.2

-3.3

-2.8

57.3

56.2

55.3

2.3

0.5

-0.5

-6.3

10.4

3.2

-10.9

6.1

4.1

-18.1

11.1

3.1

2.4

0.2

1.4

-9.4

7.6

4.1

-10.6

6.7

3.8

Peru

-11.3

13.1

3.8

1.8

2.0

2.3

-9.1

-4.9

-3.0

38.9

38.6

39.4

-0.4

-1.5

-1.6

-21.6

23.9

4.4

-9.5

11.2

3.8

-21.4

27.4

3.8

1.0

4.9

3.6

-

-

-

-12.9

13.0

4.1

Venezuela

-34.9

0.8

13.1

2669.2

624.0

239.2

-17.8

-13.7

-9.9

346.9

322.3

254.1

-2.3

-0.3

3.4

-42.2

-6.5

20.1

-38.5

6.0

12.5

-31.6

7.0

29.7

-15.5

2.1

0.3

-33.3

11.5

18.0

-35.0

0.1

4.3

Bulgaria

-4.2

3.4

4.5

1.7

1.5

2.0

-2.6

-1.8

-1.1

17.4

18.2

17.8

1.8

4.4

6.7

-12.5

8.3

5.8

0.6

2.3

3.1

-8.1

12.6

14.3

4.5

3.7

4.3

-11.1

8.7

3.4

-5.9

5.1

3.7

CIS

-3.6

2.6

4.1

4.4

5.3

4.7

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-3.6

1.6

3.1

Czech Republic

-6.8

2.9

6.2

3.1

2.3

2.0

-6.7

-4.4

-2.0

41.0

42.0

40.2

3.4

1.7

1.2

-7.3

7.7

3.1

-5.3

0.8

5.7

-8.6

3.7

11.1

1.3

-0.1

2.6

-0.6

3.5

5.0

-8.5

8.5

3.9

Hungary

-5.6

3.0

4.4

3.3

2.9

2.6

-8.9

-6.3

-4.3

78.9

80.5

80.0

-0.3

-0.5

-0.3

-8.8

8.4

5.1

-2.6

2.0

3.4

-8.4

9.7

7.9

-1.1

2.3

1.2

-0.1

5.2

2.7

-7.0

11.8

3.3

Poland

-2.9

3.6

4.8

3.4

2.6

2.5

-10.3

-5.6

-2.9

53.0

54.0

52.7

2.9

-0.3

-0.6

-1.9

8.8

4.7

-3.6

2.9

4.0

-6.5

3.7

7.3

3.4

3.8

3.0

2.4

3.9

3.4

-2.9

7.6

4.2

Romania

-5.3

2.4

4.7

2.6

2.7

2.8

-10.4

-6.3

-5.6

48.0

51.3

52.9

-5.7

-7.4

-6.8

-11.4

9.6

5.1

-5.8

2.5

4.7

4.4

3.9

4.6

-1.0

3.8

3.3

2.0

6.0

2.8

-9.8

7.3

3.2

Russia

-3.8

1.3

3.0

3.4

4.5

3.7

-5.1

-3.3

-1.1

19.9

24.1

24.6

2.9

5.4

3.7

-4.3

2.6

3.7

-9.9

8.9

5.1

-10.6

10.2

7.8

1.5

0.1

0.5

-4.8

9.9

5.1

-3.7

1.2

2.8

Turkey

1.3

3.6

4.0

12.3

13.8

10.5

-4.1

-4.4

-4.0

42.0

39.5

39.1

-5.8

-3.3

-2.6

-18.2

11.2

8.9

2.5

1.1

3.2

8.0

-0.3

3.9

1.5

1.6

2.2

2.0

1.0

3.2

0.5

4.5

2.9

Ukraine

-4.3

4.0

4.2

3.0

6.9

4.9

-5.3

-4.6

-3.0

52.8

50.8

47.3

3.9

-1.5

-2.0

-3.7

4.0

4.8

5.5

5.4

5.7

-21.5

8.6

8.2

3.4

-1.1

0.7

-

-

-

-6.2

5.7

4.2

Egypt

3.6

2.0

3.4

5.1

6.4

8.4

-8.0

-9.3

-9.6

95.0

104.1

107.6

-3.4

-3.4

-3.4

-21.1

3.3

15.6

7.2

3.0

1.1

-19.4

13.6

14.0

6.2

6.1

3.1

7.2

3.0

1.1

-9.8

6.9

5.8

Morocco

-7.0

8.1

4.0

0.7

1.2

1.3

-7.4

-6.7

-5.0

96.2

94.9

95.2

-3.6

-3.6

-3.5

-23.4

16.0

11.7

-9.1

10.0

4.3

-16.2

8.0

7.2

6.7

2.0

1.1

-9.1

10.0

4.3

-7.8

7.3

4.9

Qatar

-3.1

2.8

3.5

-2.6

0.8

2.2

-4.9

-5.1

-4.6

71.5

83.3

89.6

-6.0

-5.0

-5.2

-5.2

6.2

2.3

-5.3

5.8

4.6

-6.2

2.6

1.9

-2.3

2.6

4.1

-4.8

6.3

5.1

-2.1

2.5

2.2

Saudi Arabia

-4.0

1.9

4.8

3.3

3.8

1.7

-11.6

-3.9

-1.9

33.8

33.1

31.7

0.4

0.9

2.5

-10.3

1.5

8.6

-7.0

6.0

3.9

-10.0

15.2

5.8

-1.4

-0.8

1.4

-

-

-

-4.2

3.3

2.4

Tunisia

-8.6

6.7

4.7

5.6

5.4

5.7

-10.5

-6.7

-5.0

88.1

87.1

85.9

-7.4

-7.2

-6.4

-15.3

12.4

7.5

-15.2

9.4

4.6

-15.4

11.6

5.5

0.8

4.5

2.7

-

-

-

-6.9

7.1

2.9

United Arab Emirates

-7.7

0.8

4.6

-2.1

-0.7

1.1

-7.1

-4.1

-2.2

39.1

40.8

40.2

-2.6

-0.9

0.9

-11.4

8.4

4.5

-5.4

4.0

3.9

-5.1

4.4

4.7

5.7

1.7

2.4

-5.4

4.0

3.9

-7.3

-2.4

3.3

MENA

-5.7

3.5

4.4

17.4

19.6

13.6

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-6.2

2.1

2.8

Ghana

-0.4

5.7

4.9

9.9

9.6

9.7

-13.8

-8.6

-6.0

83.5

84.2

82.8

-2.7

-3.0

-3.3

-8.8

4.0

6.3

-2.5

7.2

5.7

-4.9

8.4

6.4

20.9

-1.9

5.1

-

-

-

-3.7

6.2

5.9

Kenya

-1.0

5.6

5.7

5.3

5.5

5.9

-9.7

-7.9

-7.1

69.5

71.7

71.2

-4.0

-4.9

-4.8

-8.9

8.8

6.7

-0.6

8.0

6.3

-7.0

8.9

8.0

6.8

5.1

4.3

-

-

-

-0.1

2.1

4.2

Nigeria

-2.2

2.1

2.3

13.2

15.8

13.2

-6.8

-5.7

-5.5

23.7

26.5

28.7

-3.6

-2.4

-1.8

-19.3

3.1

1.0

-1.9

2.8

1.5

-2.4

1.7

3.1

2.5

3.9

5.3

-1.9

2.8

1.5

-4.1

2.5

3.2

South Africa

-7.3

2.0

3.9

3.3

3.9

4.7

-13.1

-12.1

-8.7

80.1

87.6

92.1

2.0

-0.2

-1.3

-9.9

2.3

6.8

-5.9

1.4

3.6

-17.5

6.1

6.7

0.5

0.6

1.0

-5.9

1.4

3.6

-10.8

4.9

3.3

Sources: Oxford Economics, Atradius

21 | Atradius Economic Outlook – February 2021

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