Uneven vaccine roll-outs will widen recovery gaps
Budgetary, logistical and political constraints will shape what economic recovery path individual countries can adopt
Source: Official data from national authorities; Coronavirus Government Response Tracker, Oxford University
Outlook
National-level variation in economic performance will increase in 2021 compared with last year. The parameters of the policy challenge each country faces depend on its economic structure; its scope to sustain and expand stimulus; and its ability to control infection through non-pharmaceutical interventions such as lockdowns and social distancing.
Vaccination roll-outs will exacerbate recovery challenges, not least due to lingering questions about the protection offered and the impact on transmission. The recovery of high-employment sectors -- travel, hospitality, entertainment and retail -- will be especially sensitive to the success, and failures, of immunisation programmes.
Impacts
- Border closures and unequal vaccine roll-outs will dampen 2021 global growth; highly indebted and tourism-reliant states will suffer most.
- Developed states and China will have to time stimuli removal carefully; investors will watch US Fed guidance as US inflation is rising.
- The asymmetry of policy scope between developed and developing nations will widen as a dollar rebound pushes more states into debt distress.
See also
- Manufacturing and services demand is softening - Aug 23, 2021
- Hesitancy to share vaccine IP will increase inequality - Apr 12, 2021
- Prospects for the global economy in 2021 - Dec 1, 2020
- More graphic analysis