Part 1 : Short-term activity still dependent on health restrictions
This winter’s COVID-19 resurgence across Western countries is leading to tighter health restrictions and dragging on growth, even if the latest restrictions have been tailored to lessen their impact on the economy compared to those of last spring.
Europe has been most affected by these measures with the economic impact hitting the services sector worst. While the less severe restrictions in the United States have had a accordingly lower impact on growth, fourth-quarter consumption and employment figures indicate lost momentum. Economic conditions are more favourable in China, where health restrictions are minimal or implemented at a local level.
The chaos is likely to last for several more months, after which rising temperatures should limit the spread of the virus and vaccination campaigns should be more massive. Widespread vaccinations together with more of the population having been exposed to the virus should lead to restrictions being eased and growth accelerating in the second half of the year.
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The opinion expressed above is dated January 2021 and is liable to change. Latest available data as of publication date.
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