Large economic powers like the U.S. and Europe have good-sized chances at recovering lost ground from the pandemic by the end of 2021, the Financial Times reported on Sunday (May 2).
Citing data from various economists — including the effects of President Joe Biden’s $1.9 trillion stimulus fund, along with the shorter-than-expected contraction in the eurozone due to its latest COVID-19 wave — the report stated that both the U.S. and European economies have been more resilient than expected.
In Europe, the progression of vaccine rollouts is expected to provide an economic boost in the coming months. As a result, the FT noted that the likelihood of both economies recovering to pre-pandemic levels of output by the end of the year.
The economic output was only 0.9 percent below its pre-pandemic peak according to first-quarter growth figures for the U.S. released on Thursday (April 29). Economists expect a consumption boost in Q2, which will help to recover the remaining lost ground. Meanwhile, U.S. industries including food service, transportation and recreation have begun reopening. The expectation of a full recovery by the end of this year is a more optimistic forecast than what was given a few months ago, when it was expected to take until 2022.
The forecast has also drastically improved in the Eurozone, compared to the double-dip recession logged in February. Although the region is still 5.5 percent below its pre-pandemic high, economists have said there is the potential for “rapid growth” later in the year.
Economists predicted late in 2020 that the world would rebound from COVID-19, but that things would be somewhat different due to long-term digital trends like eCommerce. Many consumers have signaled that they’re willing to continue with some of the habits they have picked up during the pandemic, including online shopping.