The combination of the Joe Biden presidential victory and the prospects of a COVID-19 vaccine points to a rebounding global economy, according to a CNBC report on Monday (Nov. 9) citing forecasts by Goldman Sachs.
Goldman Sachs said it anticipates a “V-shaped” recovery — when key economic indicators quickly bounce back from a recession — that could be bigger than originally anticipated now that a vaccine appears close.
Pfizer and BioNTech announced promising news of a vaccine on Monday (Nov. 9) that is reported to be over 90 percent effective in preventing the coronavirus.
“Today is a great day for science and humanity. The first set of results from our Phase 3 COVID-19 vaccine trial provides the initial evidence of our vaccine’s ability to prevent COVID-19,” Albert Bourla, DVM, chairman and chief executive officer of Pfizer, said in a statement.
“We are reaching this critical milestone in our vaccine development program at a time when the world needs it most with infection rates setting new records, hospitals nearing over-capacity and economies struggling to reopen,” he added.
Goldman “remains confident that the global economy will outpace the consensus among economists polled by Bloomberg,” CNBC reported.
A team led by the bank’s chief economist Jan Hatzius said the surge in the infection rate will be a driving factor in economic recovery in both the U.S. and in Europe.
He also said that although the first quarter of 2021 will only see a 3.5 percent increase in growth, the bank forecasts that the U.S. GDP will return to pre-pandemic levels during the second quarter. The original forecasts, however, had been 7 percent.
Not everyone agrees on how the economic recovery will unfold. Trump economic advisor Larry Kudlow said in late September that the U.S economy was experiencing a V-shaped recovery.
But Patrick Harker, president of the Philadelphia Federal Reserve, said at the time that recovery is dependent on additional federal stimulus in addition to a leveling off of the infection rate.
In a PYMNTS interview in October, Shimon Steinmetz, chief financial officer of MerchantE, said strong housing sales and mortgage applications are hopeful signs of a rebounding economy.