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Economic crisis because of Covid, there is a lot to tackle

The announcement that one of the vaccines in development against Covid-19 is effective, stimulated the markets a few days ago, although the experts predict a slow, unstable and uneven economic recovery.

 

The heads of three central banks remained cautious, despite the optimism for the drug from the US company Pfizer and Germany’s BioNTech, which announced progress in their research, and which, in turn, led to an increase in oil prices and stock indices.

Jerome Powell, the Chairman of the US Federal Reserve, Christine Lagarde, the President of the European Central Bank, and Andrew Bailey, the Governor of the Bank of England, agreed that a vaccine alone is not enough to boost the economy. While the economists commended the scientific advances of the drug in preventing the spread of the coronavirus SARS-CoV-2, that caused Covid-19, they considered it hasty to evaluate the implications of the news for the direction of the global economy, especially in short term.

Amid the rise of infections in the United States and Europe, the three officials warned of the need for governments and central banks to support with large-scale stimulus, in order to avoid unemployment, and to reduce corporate credit.

The managers said that until there is a vaccine, there is a great uncertainty about what can happen.

Following the economic fall in the first nine months of the year, the last quarter of 2020 needs to be a turning-point for recovery, but the fresh outbreaks of the disease in different countries, with their respective restrictive measures, raise doubts about this process.

According to Business Insider, the positive effect of the vaccine against the coronavirus will have an impact on the overall economic predictions from the second half of 2021 and in 2022, because the vaccine from Pfizer is still in development, as well as another 40 globally.

According to the source, the existence of the drug will initially impact consumerism, savings, investments, and tourism. However, it is difficult to predict when will that happen.

Raghuram Rajan, former Chief of the International Monetary Fund, predicts that the impact of Covid-19 will last a long time, regardless of whether there is a vaccine or not.

The delay in growth influences not only the discovery of a medicine capable of slowing the spread of coronavirus, but also its distribution, which make take time due to the complexity of the process.

The find of an effective vaccine will mean the starting point for a stabilisation process of both health and economy in the countries, which is planned for mid- or late 2022.

of a possible antidote to prevent contagion from Covid-19 creates optimism, hope and upside movement of markets, following a year in the shadow of the pandemic. (PL)

(Translated by Cristina Popa – Email: cristinapopa83@hotmail.co.uk) – Photos: Pixabay

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