Recovery in the Americas is expected to speed up from the second quarter of 2021 as vaccine rollout picks up pace and foreign investment starts pouring in, supported by accommodative monetary policies. The Americas is expected to recover in 2021 and real GDP is forecasted to grow by 4.7%, says GlobalData, a leading data and analytics company.

Kausani Basak, Economic Research Analyst at GlobalData, says: “As of March 2021, COVID-19 case fatality rate has declined in the Americas. Signs of recuperation has been detectable in the economy since late 2020. In Brazil, the Business Confidence Index (BCI) rose to 102.7 in January 2021 after bottoming out at 95.07 in May 2020. Canada’s BCI also improved during August-October 2020 – though it was still below pre-pandemic levels. However, the US’s BCI has improved steadily from July 2020 and stood at 101.4 in January 2021. This exemplifies the necessity of a strong fiscal stimulus policy and central bank’s proactivity in reviving business activity, thereby boosting employment and consumption.”

Basak continues: “The new stimulus bill, approved by the US administration in March 2021, will support recovery in the largest economy in the Americas. The US exhibited steady rise in retail trade in the last half of 2020, though its industrial production continues to contract. According to GlobalData forecasts, the real GDP is expected to rise by 5.3% in 2021 as compared to a decline of 4.2% in 2020. Invigorating domestic demand and the recovery in the manufacturing sector of the US is of utmost important to a sustainable recovery in 2021.”

Brazil’s economy, the second largest in the Americas, is forecasted to rise by 3.5% in 2021. Meanwhile, Canada’s economy has been performing better than its regional peers as the government was able to successfully contain the pandemic. Mexico’s economy has showed signs of recovery as business and consumer confidence improved in the second half of 2020; however, confidence levels remain significantly below pre-pandemic levels.

Mexico’s dependence on its export sector makes its recovery highly vulnerable in 2021. GlobalData has forecasted the real GDP to expand by 4.4% in 2021. In 2021, both the North Americas and the South Americas are expected to focus on consumption and international trade-driven growth.

Basak concludes: “Coordination among partners and breaking away from internal conflicts are of foremost importance to the Americas region to enable recovery. Higher flow of investments in the region and simultaneous growth in e-commerce is expected to enhance growth opportunities. In the Summit of the Americas, scheduled to be held in 2021, greater regional integration and trade promotion among countries are expected to be of highest importance.”