Daily Management Review

Analysts name key condition for global economic recovery


Mass vaccination of the population will be the key to global economic recovery in 2021, according to analysts at the international insurance company Euler Hermes.

Mass vaccination will lead to a revival of the service sector, a synchronized economic recovery in various sectors, the partial spending of people's savings and the revival of investment in the corporate segment, the paper said. In countries that will get access to coronavirus vaccines later than others, the economic recovery could stall, analysts say.

The main threat to global economic recovery will be the short lifespan of the vaccine. Its limited effectiveness would undermine public confidence in the drug and would require more resources for frequent vaccination campaigns. 

Another risk to global GDP is the mutation of the coronavirus, forcing researchers to develop a new drug. A premature removal of anticoronavirus restrictions, insufficient fiscal and monetary support for households and businesses, the threat of debt crisis in several countries and banking sector problems may also hamper the economic recovery.

Due to the second wave of the pandemic, the situation in the global economy deteriorated at the end of 2020. Economists estimate that global GDP will fall by 4.2 per cent by the end of the year. 

However, thanks to the emergence of several effective vaccines against COVID-19, analysts have improved their forecast for a global economic recovery in 2021. While they had previously expected global GDP to increase by 4.2 per cent, the forecast has now been raised to 4.6 per cent. In 2022, global economic growth could reach 3.8 per cent.

source: eulerhermes.com