SINGAPORE (July 9): In recent days, renewed concerns have been expressed about the recovery in the global economy as the number of new Covid-19 infections in the United States, India and Brazil surged — precipitating fresh lockdowns in many cases. Worse still, a few new clusters of infections emerged even in countries that had managed the pandemic reasonably well, such as Australia. Because Asia’s prospects hinge on how quickly global demand can revive, we need to determine whether the world economy could really be set back by these developments. 

Overall, we remain confident that economic growth around the world will indeed begin a strong recovery in the coming months. That will put the global economy in a good position to deliver a substantial further rebound in 2021. There are two reasons for this view. One is that, as most of the world learns how to contain the pandemic, the economic damage that it causes is diminishing. That means that, over time, there will be less need for economy-crushing lockdowns. This being the case, the question then is how quickly the comeback in activity can happen, and how robust and sustained that rebound can be? Here, too, we are optimistic because recent data tells us that consumers are more resilient than expected and policy support has been much quicker and more powerful than ever before.

The pandemic is not over but its worst economic damage is past

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