If the COVID-19 vaccine becomes widely available around the world, the global economy will grow by 4 percent and China's by 7.9 percent in 2021, according to the World Bank's latest Global Economic Prospects report on Tuesday.

A worker supervises production at an intelligent control unit, Nanjing, Jiangsu Province, China, October 19, 2020. (Photo: Getty Images)

Specifically, the nascent rebound in advanced economies stalled in the third quarter of 2020, suggesting a slow and challenging recovery. The World Bank expects US GDP to contract by 3.6 percent in 2020 and grow by 3.5 percent in 2021. Output in the eurozone is forecast to grow by 3.6 percent this year, after falling by 7.4 percent in 2020. Japan’s economy is forecast to grow 2.5 percent in 2021. In emerging markets and developing economies, the bank expects growth of 5 percent in 2021 after a contraction of 2.6 percent in 2020.

The report argues that global economic activity will contract slightly less in 2020 than previously expected, mainly because of smaller contractions in advanced economies, with a stronger recovery in China in particular. But the impact of the pandemic is far-reaching and is likely to depress economic activity and incomes for a longer period. The bank warned that the main task now was to contain the spread of the disease and ensure rapid and widespread deployment of the vaccine. In addition, to support a sustainable economic recovery, governments also need to implement investment-promoting reforms aimed at sustainable growth that reduces reliance on government debt.

"While the global economy appears to have entered a subdued recovery, policymakers face formidable challenges—in public health, debt management, budget policies, central banking and structural reforms—as they try to ensure that this still fragile global recovery gains traction and sets a foundation for robust growth,” said World Bank Group President David Malpass.