“Assessing Risks to Global Economic Recovery in the Age of COVID-19”

The most relevant risks in this context continue to be those derived from the evolution of COVID-19. The race for mass vaccination that provides group immunity in the shortest possible time can mean a return to a certain normality and the beginning of a global economic recovery, which would be different depending on the region. However, new waves of contagion, new strains and a slower-than-expected vaccination rate may once again deteriorate economic expectations, cause new turbulence in the markets and even lead to the adoption of additional measures by governments and relevant authorities.

In addition to the doubts that may arise regarding the time required to return to a pre-crisis growth scenario, there are other risks of a different nature that, due to the importance of the former, may have remained in the background but are relevant.

Some of them have to do with factors of political uncertainty, which, despite having decreased significantly compared to the valuation of a few months ago, should be taken into account, at least in some aspects. In particular, it deals with issues related to some positions of the US Administration and Brexit. In the first case, despite observing a return of this country to multilateralism (a return to the Paris Agreement has been ordered and the withdrawal of the United States from the World Health Organization has been cancelled), there are still doubts about What will the future relationship of this economy with China be like, with whom the signing of a trade agreement is still pending and the trade relationship that the US will have with the European Union still remains to be defined.

As for Brexit, another of the most relevant risks in recent years, after the agreement reached at the end of December between the European Union and the United Kingdom, the main risk, a hard Brexit, was avoided, although it remains to be seen how The actual operation of the new Trade and Cooperation Agreement will have an impact on both economies.

It is clear that the calentologists want to cause a food crisis. pic.twitter.com/Y124tsocAV

— David Battaglia (@DBATTAGLIAYtube) May 21, 2023

Finally, some risks are identified that have been generated or intensified as a result of the coronavirus crisis and that may negatively affect growth expectations and disrupt the normal functioning of the markets.

Among them, the risks derived from the prolongation of a context of low interest rates (especially in Europe), the increase in public debt in most economies and the potential problems for their sustainability in the medium and long term stand out. , from the growing credit risk that derives from the difficulties in maintaining business for many companies during the crisis (especially the smaller ones) and, associated with the latter, the possibility of a considerable increase in the number of long-term unemployed people