Al-`Aqar Healthcare REIT Annual Report 2020

AL-`AQAR HEALTHCARE REIT Annual Report 2020 46 Market Report Summary Global Growth . After an estimated 3.5% contraction in 2020, the global economy is projected to grow5.5% in 2021 and 4.2% in 2022. The estimate for 2020 is 0.9 percentage point higher than projected in the October WEO forecast. This reflects the stronger-than-expected recovery on average across regions in the second half of the year. The 2021 growth forecast is revised up 0.3 percentage point, reflecting additional policy support in a few large economies and expectations of a vaccine-powered strengthening of activity later in the year, which outweigh the drag on near-term momentum due to rising infections. The upgrade is particularly large for the advanced economy group, reflecting additional fiscal support—mostly in the United States and Japan—together with expectations of earlier widespread vaccine availability compared to the emerging market and developing economy group. 1. Global Economy (Extracted from World Economic Outlook Update, International Monetary Fund, January 2021) GLOBAL GROWTH SET TO STRENGTHEN IN THE SECOND HALF OF 2021. Global Trade. Consistent with recovery in global activity, global trade volumes are forecast to grow about 8% in 2021, before moderating to 6% in 2022. Services trade is expected to recover more slowly than merchandise volumes, however, which is consistent with subdued cross-border tourism and business travel until transmission declines everywhere. 2020 is 0.9 percentage point higher than projected in the October WEO forecast Inflation. Even with the anticipated recovery in 2021–22, output gaps are not expected to close until after 2022. Consistent with persistent negative output gaps, inflation is expected to remain subdued during 2021–22. In advanced economies it is projected to remain generally below central bank targets at 1.5%. Among emerging market and developing economies, inflation is projected just over 4%, which is lower than the historical average of the group. Risk to the outlook. Exceptional uncertainty surrounds the baseline projection. Although new restrictions following the surge in infections (particularly in Europe) suggest growth could be weaker than projected in early 2021, other factors pull the distribution of risks in the opposite direction. Beyond the pandemic, the December agreement on the terms of the United Kingdom’s exit from the European Union has eliminated a key downside risk (i.e., a “no-deal Brexit”). On the upside, further favourable news on vaccine manufacture (including on those under development in emerging market economies), distribution, and effectiveness of therapies could increase expectations of a faster end to the pandemic than assumed in the baseline, boosting confidence among firms and households. On the downside, growth could turn out weaker than in the baseline if the virus surge (including from new variants) proves difficult to contain, infections and deaths mount rapidly before vaccines are widely available, and voluntary distancing or lockdowns prove stronger than anticipated. Global trade volumes are forecast to grow about 8% in 2021