Over the past weeks, we have written a fair bit on the imminent recovery in the global economy, which we think will be stronger than many previously expected. We highlighted the V-shaped recovery in manufacturing Purchasing Managers’ Index (PMI) for major economies, many of which have recovered steadily from the trough and are now in expansion territory. But, we admit, this is only half the picture.

Historically, the services sector acted as “ballast” to other industry (such as construction, property, manufacturing and commodities) declines, providing resilience to economies by being less cyclical. For instance, consumer spending on entertainment and F&B tends to hold up comparatively well even through crises.

The Covid-19 pandemic was unprecedented, however, in that it resulted in a vast majority of the world’s population “grounded” within the confines of their own homes — be it mandatory or voluntary — with the closure of international, and at times even state, borders.

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