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Economic and Industry Outlook 2021

The report sets out the outlook for global economic growth in the coming years following the impact of the Covid-19 crisis and following profound changes in the economic context. The world economy is moving toward a new normality, currently going through the recovery phase in a scenario where vaccines are acting as a positive catalyst reducing long-term risks, but where there is still the possibility of a further contraction given the outbreaks of the virus. Thus, the world economy is expected to grow by around 4.5% during 2021-2022, strongly supported by the performance of developed markets that will capitalize on the double monetary and fiscal boost. Emerging countries will also recover, although at a slower pace. On the other hand, unlike other activities, the insurance sector has shown some resilience in the current situation, thanks to the good performance of some business lines that are less vulnerable to the current context. However, the fall in activity is negatively affecting the segments most closely linked to the economic cycle, while accommodating monetary policies and the movement towards liquidity positions by families and companies is having the same effect in the insurance business linked to savings, particularly in developed markets. The economic recovery expected in 2021 may lead to a recovery of the ground lost by the sector, especially in emerging countries, although this will be uneven across markets and business lines.