Global economy may shake off pandemic in 2021, say leaders By Reuters

© Reuters. FILE PHOTO: Employees wearing face masks work at a component maker SMC factory during a government-organized visit to its facilities following the outbreak of the coronavirus disease (COVID-19) in Beijing.

By Mark John (Reuters) – Vaccines and new economic stimuli promised by President-elect Joe Biden will give the world economy a chance to leave the coronavirus pandemic behind in 2021, policymakers and officials said. industry leaders at the Reuters Next conference. His optimism came despite a resurgence of COVID-19 cases that has prompted the World Bank to lower its growth forecast for this year and warn that delays in vaccination programs could further reduce the recovery. The head of German engineering giant Siemens AG (OTC 🙂 said China is currently boosting the world economy, but was optimistic about the recovery in the United States, where Biden has promised faster rollout of vaccines and more economic stimulus. “In the United States … they have all the cards and if they put the money to work wisely, there will be a very, very strong second half of 2021, and especially 2022,” said Siemens CEO Joe. Kaeser said. Europe and the United States now need to “get down to work and put in the billions and trillions of dollars and euros that have been promised to work,” he told the digital forum. The fight against the pandemic, which has claimed 1.9 million lives worldwide, has now entered a critical stage as countries around the world launch vaccination campaigns aimed at immunizing large sections of their populations. before the end of the year. At the same time, new emerging variants of the virus have raised concerns about vaccine resistance and a more rapid spread of the disease, while China is battling a surge in cases that has seen more than 28 million people subjected to it. to home quarantine. The Washington-based World Bank last week lowered its global growth forecast for 2021 to 4% from 4.2% and said the increase in production could be as small as 1.6% if there were delays in vaccines. However, the president of the European Central Bank, Christine Lagarde, stuck to the existing ECB forecasts for the euro zone, provided that the lockdown measures are lifted at the end of March and vaccines are distributed properly. He cited as positive the fact that, after the elections in the state of Georgia, Biden could count on the support of the United States Senate for his economic program and that Britain and the European Union had managed to avoid a no-deal Brexit on 31 December “. of the uncertainties that we had on the horizon that made us look to the future with a dark cloud over our heads, some of that has been cleared,” Lagarde said at the conference. “From that perspective, we started on a more positive than some would like to see, “he added, vowing that the ECB had the ability to add emergency stimulus if necessary. The ECB expects growth of 3.9% this year in the 19 countries that use the euro. , more optimistic than many private sector economists LOANS TO CHINA Even in the best of cases, the global recovery is not expected to be smooth, and concerns are growing that low-income countries may be left even further back as some sectors most exposed to the pandemic fight for their own existence. Qantas Airways Chief Executive Alan Joyce expected the recovery to be “uneven around the world” and said the airline has parked its long-haul A380 fleet for the next three years. “We believe it will take that long for international demand to return,” he added. Chris Hyams, chief executive of job posting website Indeed, said it was not yet clear whether demand in sectors such as construction, which has managed to sustain itself through the pandemic, has been absorbed in the next few years. “What we don’t know is that when things come back, people have just stopped in the next five years of construction and everything will slow down, or is there more work to be done?” he said. When asked about the risk of developing nations falling behind in economic recovery as their people struggle to pay for COVID-19 vaccines, Lagarde said it would be “counterproductive” for the rich world if they did not show solidarity. “It is in the self-interest of developed countries to make sure fragile, developing and low-income states have access to vaccination when needed,” said the ECB chief. World Bank chief economist Carmen Reinhart said increasing pressure on debt in many of those countries meant that China, now the world’s largest official creditor, would have to start restructuring the debt owed to it. “What I think China will have to do to deal with this is what previous creditors have done in the past, that is, you have to restructure,” Reinhart told a panel on economic inequality. “And restructure big, that is, lower interest rates, longer maturities, principal amortization, or some combination of that.” For more information on the Reuters Next conference, click here http://www.reuters.com/business/reuters-next To watch Reuters Next live, visit https://www.reutersevents.com/events/next/ register.php