December 2, 2020
Macroeconomic Outlook 2021: 21: It Was A Very Good Year...
So said Frank Sinatra, but do our experts agree that 2021 and beyond will be “good years”? In this 2021 outlook we discuss our macroeconomic forecasts for the coming couple of years.
1 minute
Executive Summary
Following an unparalleled 12 months, we enter 2021 with some light at the end of the tunnel. The arrival of vaccines will hopefully mean a swift reopening of economies, and a potential broad-based cyclical rally in risk assets. But the economic rebound is unlikely to arrive prior to the second half of the year. Overall, we believe an end to the pandemic and ongoing policy support will contribute to a brighter future. Our 2021 Macroeconomic Outlook assesses what a post-coronavirus, ‘new-normal’ world will look like - and outlines the possible investment implications.
Eurozone
Good news on the search for a coronavirus vaccine is unlikely to change the macro trajectory before mid-2021.
United States
Uncertainty will persist into 2021, over a winter virus outbreak, policy gridlock after the US election and the roll-out of a vaccine.
China
Normalising virus conditions, official policies and the natural economy will shape the 2021-2022 outlook.
Japan
Japan hasn’t been as badly exposed to COVID-19 as other countries and significant support from the government and the Bank of Japan make it more resilient.
United Kingdom
The virus has left a 10% hole in UK output – and a winter outbreak and Brexit disruption could dampen any rebound over the coming quarters.
Emerging Markets
Global trade recovery and vaccine to allow slow policy normalisation.
