Nearly a year into a pandemic that has ravaged the global economy, the only clear pathway toward improved fortunes depends on containing the virus.
With the United States suffering its most rampant transmission yet, and with major nations in Europe again under lockdown, prospects remain grim for a worldwide recovery before the middle of next year, Peter S. Goodman reported in The New York Times. Substantial job growth could take longer.
The most significant hope emerged this month in the form of three vaccine candidates, easing fears that humanity could be subject to years of intermittent, wealth-destroying lockdowns.
The prospects of a global turnaround can be seen in China’s aggressive efforts to contain the virus after initially covering up the epidemic. Its factories roared back to life, and its 1.4 billion people resumed spending, making China a rare engine of growth in the world economy.
Between July and September, as the apparent containment of the virus proved effective along with the lifting of government restrictions, most major economies expanded sharply. The United States grew more than 7 percent compared with the previous quarter, and Germany by more than 8 percent. The British economy expanded by nearly 16 percent, and France’s economy grew 18 percent. Such performances were embraced by some as proof that economies would snap back as soon as the virus was gone.
Unlike in the aftermath of the global financial crisis, when households were contending with crippling debts — especially in the United States — many households in large economies are this time flush with cash, given the enforced savings regimen of the lockdowns.
“You have a lot of pent-up money,” said Kjersti Haugland, chief economist at DNB Markets, an investment bank in Oslo. “This is definitely a scenario for a rebound.”