THE world economy is set to surpass US$100 trillion for the first time in 2022, two years earlier than previously forecast, according to the Center for Economics and Business Research (CEBR).

Global gross domestic product will be lifted by the continued recovery from the pandemic, although if inflation persists it may be hard for policymakers to avoid tipping their economies back into recession, the London-based think tank said.

“The important issue for the 2020s is how the world economies cope with inflation,” said Douglas McWilliams, the CEBR’s deputy chairman. “We hope that a relatively modest adjustment to the tiller will bring the non-transitory elements under control. If not, then the world will need to brace itself for a recession in 2023 or 2024.”

In its annual World Economic League Table, the CEBR also predicted India will regain sixth position from France next year and become third largest economy in 2031, a year later the previously predicted.

The United Kingdom is on track to be 16 percent larger than France in 2036 despite Brexit.

The report showed Germany was on track to overtake Japan in terms of economic output in 2033. Russia could become a Top 10 economy by 2036 and Indonesia looks on track for ninth place in 2034.

Climate change will lower consumer spending by US$2 trillion a year on average through 2036 as companies pass on the cost of decarbonizing investment.

The world saw a revival in economic growth, trade and investment, and consumer demand. The International Monetary Fund (IMF) projected the global economy would grow by 5.9 percent in 2021, following a contraction of 3.1 percent in 2020.

Global foreign direct investment flows in the first half of 2021 showed stronger-than-expected rebound momentum, and global trade is expected to reach a record high this year, the United Nations Conference on Trade and Development said. However, the global economic recovery has been hindered by more complicated and enduring obstacles.

Kristalina Georgieva, managing director of the International Monetary Fund (IMF), earlier this month called on global cooperation to control the COVID-19 pandemic and support the economic recovery as the new Omicron variant has spread around the world.

“The global economy has continued to recover, but the recovery faces many risks, including the uncertain path of the pandemic amid the arrival of new variants, and the outlook on inflation,” Georgieva said.

“To address these challenges, urgent policy action is needed to control the pandemic, limit scarring, and transform the global economy,” Georgieva said.(SD-Agencies)