By Isaac Cohen*
The most intriguing question for the new year is if 2021 will be better than 2020. That is if the world economy will overcome both the pandemic and the economic contraction it caused.
Therefore, the first question for 2021 is if massive vaccination will vanquish the virus and will allow the return of normalcy.
The second question is if the achievement of collective immunity, through vaccination, will generate a return to levels of spending that will stimulate a strong recovery of employment and growth. In the United States the expectation is that the economy will bounce back vigorously, in the second half of this year. The Nobel winner economist and New York Times columnist Paul Krugman has predicted a “Biden boom” will happen, due to “a lot of pent-up demand” among those who remained employed and who saved and accumulated “a lot of liquid assets” while quarantined (New York Times 11/21/2020).
Finally, the third question has to do with China, the only major economy that grew moderately in 2020, while the rest underwent severe contractions. The National Bureau of Statistics said China’s economic growth last year reached 2.3 percent, which still is a steep fall from around 6 percent growth in 2019. The question is if the Chinese economy can return to rates of growth that sustain strong demand for commodities, as it did after the Great Recession of 2008-2009.
Briefly, if the pandemic can be overcome, 2021 looks better that its predecessor.
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.