Economic output in G20 area slowed to 2.1% in fourth quarter of 2020

Tighter Covid restrictions led to slump in growth compared with previous three months

epa09076015 A woman receives a dose of a vaccine against COVID-19 during a vaccination campaign at Dasappa Hospital in Bangalore, India, 15 March 2021. India recorded its highest single-day spike this year with over 25,000 covid-19 cases reported from all over the India and mainly from Maharastra state.  EPA/JAGADEESH NV
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Economic output in the Group of 20 area slowed to 2.1 per cent in the fourth quarter of last year, as the effects of Covid-19 restriction measures hampered growth, according to the Organisation for Economic Development

Growth in gross domestic product in the final three months of the year was significantly down from the 7.8 per cent seen in the third quarter of the year when movement restrictions eased in some parts of the world.

For 2020 as a whole, GDP contracted 3.3 per cent in the G20 area, with only China and Turkey recording growth of 2.3 per cent and 1.8 per cent, respectively.

“Growth of GDP in the G20 area slowed to 2.1 per cent in the fourth quarter of 2020, down from the large rebound in the previous quarter that followed the unprecedented falls in the first half of the year due to Covid-19 containment measures,” the OECD said in a statement.

The Paris-based OECD said earlier this month that the rebound from the pandemic had been faster than expected on the back of vaccine breakthroughs and mass inoculation programmes.

It expects the global economy to expand 5.6 per cent this year and 4 per cent in 2022, while the International Monetary Fund forecasts the global economy will expand 5.5 per cent this year and 4.2 per cent in 2022.

During the last quarter of last year, India recorded the highest growth among G20 countries, with a rise in output of 7.9 per cent. This was down significantly on the 23.7 per cent growth seen in the previous quarter.

Other countries to record positive GDP growth, albeit lower than in the third quarter, included Mexico at 3.3 per cent and Brazil at 3.1 per cent – two countries that have been hit with a high number of coronavirus cases and deaths

Indonesia also secured comparatively high GDP growth of 2.9 per cent for the final quarter, followed by Japan and Saudi Arabia with 2.8 per cent and China with 2.6 per cent.

Earlier this month, China set a modest annual economic growth target of above 6 per cent for 2021 and pledged to create more than 11 million new urban jobs.

However, while GDP fell for all G20 nations last year bar China and Turkey, the country most heavily affected was the UK, which saw a contraction of almost 10 per cent.

Britain has faced almost 12 months of restrictions since the start of the crisis, causing the economy’s output in 2020 to plunge by the most in 300 years.

The trend continued in January when Britain's economy contracted 2.9 per cent after Covid restrictions tightened across the country.

The G20, formed in 1999, is a group of 20 of the world’s largest economies that meets regularly to co-ordinate policy on trade, health, climate and other issues.