The short-term picture in advanced economies is very different. The immediate economic prospects of many have worsened again as they battle still worryingly high rates of infection and impose new lockdowns. We expect eurozone GDP to contract in the final quarter of 2020, and the United States starts 2021 on a weak footing.
In addition, for all the optimism generated by vaccines, the production, distribution and logistical challenges of disseminating them around the world are huge. If too many people refuse to be inoculated, it could slow the pace at which social distancing measures are eased. So while there is light at the end of the tunnel, it is still some way in the distance.
Consumer spending is one of the factors that will help to determine the trajectory of global recovery in 2021. Growth will depend in part on the willingness of high earners in particular to start spending savings accumulated during lockdowns. Pent-up demand for goods has helped kick-start the global rebound, but revival in demand for services such as restaurants, concerts, and the like could be more gradual. International tourism could take much longer to recover.
The continued evolution of mainland China’s economy – still the biggest driver of global growth – will also have worldwide implications in 2021. Investment has led the Chinese recovery so far, but spending on infrastructure and property construction is likely to decelerate in the coming year. This means that overseas producers of commodities such as metals may have already had the best of the China boost.