It has been projected by the International Monetary Fund (IMF) that the US and China governments will experience a faster economic recovery time than the other parts of the world. It is predicted that the US and Chinese economies will have fully recovered by 2022 and will have no more than a 1.5% gap from the economic standpoints that would have been projected before the pandemic. Other first-world countries and richer countries will still be short by around 2.5% compared to their pre-pandemic path. While other emerging world economies will be short by around 8%, which is substantially larger than previously anticipated.
The reasons that China and the US are experiencing such short losses during the pandemic is due to the fact that simply they are the largest economies in the world, allowing for a sharp spread in industries and allowing their economies to be highly divergent. China compared to the US, however, is expected to recover even quicker due to the aggressive containment measures taken by the government to limit the spread of the virus. The US, on the other hand, has struggled heavily to contain the spread of the virus and therefore has spent more than any other country in its rehabilitation efforts.
While this is all said, there is still much uncertainty in how the world economy will develop in the coming months. The IMF warns that rising infection rates, as well as new virus variants and the control of the vaccine distribution, can all majorly affect how a country’s recovery plan takes place. This causes many individuals to be wary of how to spend their money in the upcoming months as our economy slowly returns to normal and markets start opening back up.
The projected growth recovery has especially harsh impacts on women, the poor, the informally employed, and youth. These groups of people are especially susceptible to the economy variances that will occur in the upcoming months as the restrictions being to lift. While the vaccine distribution and therapies become more readily available, how will schools and governments handle the movement towards a more open economy? In addition, what regulations will be required to be passed in order to ensure the universal distribution of vaccines and facilitating access to these countermeasures against the virus at affordable prices to all? Will the poor still be unable to afford the vaccine and other cares or will the need to ensure everyone safety be a higher priority?
Lucas Zhang was a Finance major at Ohio State University. He writes about finance, mortgages, and technology for Irish Mortgage Brokers.