Global | Coronavirus Watch: Staying the course, despite bump
Suspension of AstraZeneca vaccinations in a number of European economies, news of more vaccine supply problems, and rising Covid case numbers globally are all indications that the transition to normality will be uneven. But we don’t see these bumps as sufficient grounds to cut our economic forecasts.
A pick-up in mobility across the G20 may help explain the recent renewed rise in global Covid cases. It may be that voluntary social distancing is waning and that some policymakers are prepared to loosen restrictions as long as cases remain reasonably contained. If this is the case, higher infections may not automatically signal weaker activity ahead.
Even if higher Covid cases crimp future growth, recent data suggests that recent lockdown-induced contractions may not be as severe as initially feared. So if downward revisions to Q2 are needed, they may be offset by better Q1 performance.
Finally, recent news from Israel suggests that economies that are ahead in vaccine rollout speed might begin to reap the rewards soon. Israel has recorded a sharp drop in Covid cases and hospitalisations even as restrictions have been steadily lifted, providing more light at the end of the tunnel.