Global GDP to reach pre-COVID levels by mid-2021, says Deutsche Bank

World GDP will return to the level it was before COVID-19 by mid-2021 after a stronger-than-expected economic bounce in recent months, Deutsche Bank said on Monday, but bloated debt levels and a shift in policy could heighten the risk of a financial crisis.

"Global economic recovery from the depths of the COVID-19 plunge this past winter and spring has proceeded significantly faster than we envisioned," Peter Hooper, Deutsche global head of economic research wrote in a note to clients.

"As Q3 draws toward a close, we estimate that the level of global GDP is about half way back to its pre-virus level, and we now see that journey being completed by the middle of next year, a couple quarters sooner than in our previous forecast."

Deutsche upped its forecast for global GDP to -3.9% after predicting in May a year-on-year contraction of -5.9% for 2020. For 2021, Deutsche raised its growth forecast to 5.6% from 5.3%.