As of December 10th, 2020, many companies have announced the final version of their COVID-19 vaccines, with Pfizer already shipping them out for public use. What effect will this have on the global economy?
First, it raises public morale. It brings assurance to the human mind. This allows consumers to redevelop their sense of discretionary spending, which is a big source of revenue. As of now, most consumers only opt to go out to meet their most basic needs. With more willing to spend, the economy will receive a further boost, speeding up the return to pre-COVID-19 numbers.
Experts expect the global GDP to be the highest since the late 1970s. However, this gain is not expected to spread very evenly. China’s economy has already been booming for the past few months and is expected to continue to do so. Countries like the United Kingdom, India, and Spain have taken harder hits, so their economic recovery is not expected to break records. However, all of this progress hinges on the effectiveness of the vaccines and any health hazards that might come as their side effect.
Another reason why the global economy might not rebound as projected is the mass closure of small businesses. Small businesses contribute a lot to a nation’s economy. Especially in the United States, the revival of these businesses is crucial to America’s economic gain. To do so, the federal government might have to allocate funds for a second round of small business loans.
Therefore, it is a little too early to predict the economic growth in 2021, but it is most likely to improve, especially when compared to 2020. It all depends on the effectiveness of the newly announced COVID-19 vaccines, especially considering the rising COVID-19 cases in the United States.