The global economic recovery is being delayed by the slow deployment of vaccines

The world economy faces As of 2021, more difficult than expected, as coronavirus infections increase and time is needed to deploy vaccines.

While global growth is still in the process of recovering from last year’s recession, it may take longer to ignite and not be as healthy as previously predicted. The World Bank already cut back this month forecast at 4% in 2021 and the International Monetary Fund will update its own outlook this week.

Double dive recessions are now expected in Japan, Japan the euro area and the United Kingdom, as restrictions are applied to curb the spread of the virus. Cases are reported in the US dragging down retail spending and hiring, prompting President Joe Biden’s new administration to seek an extra $ 1.9 trillion in fiscal stimulus.

Only China has achieved a V-shaped recovery after containing the disease soon, but even there consumers are wary of partially closed Beijing.

High frequency indicators followed by Bloomberg Economics point to a worrying start to the year, with advanced economies starting on a weak note and diverging among emerging economies.

“This is a reflection of the harsh reality that, before a widespread distribution of the vaccine, a return to normalcy is an unlikely prospect,” said Tom Orlik, chief economist at Bloomberg Economics.

It is a blatant prospect faced by policymakers after $ 12 trillion in tax support and the printing of money from central banks failed to consolidate the recovery. Those in the Federal Reserve are meeting this week.

Market optimism

While the economic outlook has darkened as they marked the weeks of 2021, financial markets have continued to increase optimism for government stimulus and the deployment of the vaccine will drive a recovery. Global stocks reached one all-time high last week.

The gap is likely to appear statements by world leaders, including Chinese President Xi Jinping, his French counterpart Emmanuel Macron and German Chancellor Angela Merkel and others who will speak at an online event the World Economic Forum will hold from January 25-29 instead of the meeting usual at Swiss Ski Resort Davos.

The United States, Britain and the European Union are administering vaccines, setting a stage for some parts of the world. the immunity of the herd while others are delayed, harming the poorest economies.

“Even though there is light at the end of the tunnel, there is still a long and difficult road ahead before leaving,” said Erik Nielsen, chief economist at Unicredit SpA Group. “As long as the pandemic terrorizes part of the world, normalcy will not be restored anywhere.”

The optimistic outlook is based on the authorities obtaining the vaccinate on a material scale by mid-year and neutralize the threat of more transmissible variants of the virus. The continuous provision of easy monetary policy and hope that governments will not withdraw their support prematurely, as some had done after the financial crisis.

Blockades and other restrictions on movement also appear to have a less damaging economic impact this time around than last year, as consumers and businesses have found ways to adapt. And China’s leadership in China global recovery shows what is possible once the virus is controlled.

“The first quarter will be worse than we thought,” said Shaun Roache, chief Asia Pacific economist at S&P Global Ratings in Singapore. “But we see a delayed recovery, not a derailment.”