The US economic activities have been strongly boosted by the COVID-19 vaccination expansion programme and the US$1.9 trillion financial support package of the administration of President J. Biden. The world’s leading economy is on a strong growth momentum and is expected to accelerate from next spring thanks to increasing consumer confidence.
The US labour market has also improved as more people returned to work, with the largest growth in recruitment in the manufacturing, construction, entertainment and hospitality sectors. According to the US Department of Labor, the economy created 916,000 jobs in March, the largest increase in seven months. Also in March, the US consumer price index recorded the strongest increase in nearly nine years.
The Eurozone economy has also recorded a rapid recovery in April, although countries are still applyinglimited measures to control the epidemic. The region is seeing the strongest growth since last summer thanks to the boom in manufacturing. The service sector also witnessed recovery for the first time since August 2020.
Companies adapting to the epidemic and being better prepared for the future helped the service sector return to growth. The Euro-zone Services Purchasing Managers’ Index (PMI) increased from 53.2 points in March to 53.7 points in April. This is the second consecutive month that Eurozone’s business activities have grown after four months of consecutive decline.
Asia is also considered as the main driving force for the sustainable recovery of the global economy. The International Monetary Fund (IMF) has forecast that Asia’s economic growth in 2021 may reach at least 6.5%, a significant recovery from a 1.7% decline last year. Asian countries in general have strengthened their healthcare systems, stabilised global supply chains, leading to the recovery in trade and investment.
Effective anti-epidemic measures and revived manufacturing operations in China and the Republic of Korea (ROK) have left the two countries among the main factors leading to the continent’s positive economic growth prospects. China’s economy in the first quarter of last year grew 18.3% year-on-year, the highest quarterly growth rate since 1992, mainly due to strong domestic and international demand. The Chinese government sets a target of 6% economic growth in 2021. However, experts predict that the world’s second biggest economy could grow by about 8.6%.
ROK’s export revenue in the first quarter reached US$146.5 billion, up 12.5% over the same period last year and hit its highest level ever. According to the Korea Economic Research Institute (KERI), thanks to the recovery of exports, the forecast for growth of Asia’s fourth-largest economy is likely to reach 3.5% this year, a sharp rise from the 1% decrease last year.
Meanwhile, India’s recovery may be hampered by the serious outbreak of the pandemic. Accordingly, CARE Ratings downgraded India’s forecast for GDP growth in 2021-2022 to 10.2%, from the previous forecast of 10.7%-10.9%.
The seemingly out of control pandemic situation in India is a “warning bell” for other countries to consider while taking greater caution in making decisions to loosen restrictions and open up the economy. At the same time, it is essential that countries that have well controlled the pandemic need to increase support for countries that are struggling with a new epidemic wave. Fair access to vaccines is also crucial to push back the pandemic, as any delay in the rollout of COVID-19 vaccination can pose a major risk to the global economy.