World GDP Growth Expected to Reach 4% in 2021

The global economy is expected to expand by 4% in 2021. That GDP growth is exciting news, especially after the 2020 losses, but it isn’t a guaranteed forecast.

Economists say that the 4% GDP estimate is based on the assumption that COVID-19 vaccines become widespread throughout the year. There must continue to be a positive immune response in people, despite potential variants, for economic activity.

The only reason why 2020 wasn’t worse is that China was able to recover faster than expected, while the advanced economies had a shallower contraction than anticipated. Those actions still resulted in a 3.5% loss.

The United States Will Have a Below Average Recovery

The World Bank expects the United States to fall short of the global recovery forecast, although not by much.

As the world reaches 4% GDP growth with a COVID-19 vaccine, the U.S. is expected to see a 3.5% surge in 2021. If China gets excluded from the economic numbers, Americans would be slightly above the global average.

Japan and Europe, which saw even more of a contraction in their economies than Americans, will have similar growth struggles in 2021. Europe is expected to grow at the same rate as the United States, while the Japanese might reach 2.5% for the year.

If infections continue to rise and complications in the vaccine rollout occur, the growth estimates could be slashed by almost 70%.

Economists don’t see two consecutive years of GDP loss, but global expansion could be limited to approximately 1.5%.

On the other end of the equation, a faster-than-anticipated vaccine rollout could help the world recover 20% faster.

Although COVID-19 is creating debt risks and other significant problems in emerging economies, it is also providing new opportunities to explore business opportunities. If a vaccine can be successfully administered to most people, we should see a return to normalcy by 2022.

Tokyo Olympics Could Cost $26 Billion

After spending a year on hold, Japan plans for the 2020 Olympic games to be held in the summer of 2021 in Tokyo. The remaining competition schedule is expected to stay the same, with the next Summer Olympics scheduled in 2024.

The original cost estimate for the Olympic Games was $7.3 billion. After the organizers released an updated budget with $12.6 billion in costs, an audit took a look at the rest of the books.

Japan’s Board of Audit found billions of expenditures from national and municipal governments that weren’t included on the financial ledger. They estimate that the Tokyo Olympics could cost over $26 billion to operate.

If COVID-19 protocols are still necessary when they’re held, the price could get even higher.

Organizers Say They’re Not Responsible for the Additional Money

Tokyo 2020 is fighting back on the idea that they’re responsible for the $26 billion that the Board of Audit suggests is the real cost of the games.

The organizers say that the board aggregates several projects from across the country that could be seen as game contributors. It didn’t matter whether the expenses were part of the official program or not.

Japanese media calculate that the price of holding the Tokyo Games could reach more than $28 billion. That’s compared to the $6.9 billion in place for the 2028 games expected to be held in Los Angeles.

The one difference between Tokyo and LA is that the American organizers expect to use several existing venues for the competition. Japan had to build several items, including a national stadium and a village for the athletes.

It’s not all bad news for the 2020 Summer Olympics organizers. Sponsorship sales have reached $3.3 billion, and ticket sales have been strong enough that lotteries have had to be established. When the event’s economic impact gets analyzed, it will still be a profitable venture for the city and Japan.