Home / news / A selective and conditional improvement … These are the most prominent features of the global economy in 2021

A selective and conditional improvement … These are the most prominent features of the global economy in 2021

The announcement of the release of more than one vaccine for the Corona virus led the world to a state of optimism about economic performance and a return to normal life, but the news that the media recently carried to us about the second wave, the mutation of the virus and the emergence of new strains of it, led to a complete closure in a number of European countries, but rather Even in some Arab countries.

But the scientific efforts exerted in confronting the virus led the world to break the state of pessimism about economic and social life, and this in itself is a positive factor, but the equation in its origin has not changed for the entire economic situation, as medical scientific efforts are still the independent variable in the equation, and the economy in its aspects Different in setting dependent variable.

This is evidenced by the expectations of the International Monetary Fund in its report on the global economic prospects in October 2020, where it reduced the pessimistic forecast about estimates of global GDP at the end of 2020, to a limit of negative 4.4%, after those estimates were in the past negative limits. 6%.

However, the improvement adopted by the IMF’s estimates regarding the performance of the GDP in 2021, to reach 5.2%, will be an exceptional case, because the Fund’s expectations for the global GDP in the medium term – that is, from 3 to 5 years – will be around 3.5 percent. % Due to the negative accumulations resulting from the large closure in the period from January to April 2020, and the consequent high public debt rates, corporate bankruptcies, and increased poverty rates.

The state of optimism issued by the news of the production of multiple vaccines in more than one country has carried expectations of improvement in some sectors that will be within the framework of providing these vaccines to the countries benefiting from it, as it will lead to expected changes in the nature of economic and social life, and then there will be beneficiaries and those affected by it. The performance of the global economy in 2021, in light of the challenge of the Corona pandemic that still hangs over the world.

Increase profits in the pharmaceutical and medical care sector

Since the first moments of the Corona pandemic, the profits of companies operating in the medicine and health care sector have tended to increase at great rates, due to the increase in the rates of consumption of sterilizers and masks, as well as the increase in demand for medicines for chest diseases, or related to strengthening immunity, or seeking treatment in hospitals.

With the entry of the second wave of the Coronavirus in October 2020, the precautionary measures have returned to large segments of societies, which has led to an increase in the consumption of sterilizers and the use of preventive tools, such as masks, disinfectants, etc., which means the continuation of production lines, and an increase in the quantities produced, and thus Increasing sales and profit rates for companies operating in the production of these supplies worldwide.

However, the companies producing anti-corona virus vaccines, will be the biggest winner in 2021 and beyond, because they are in a monopoly position, especially since their production for the entire 2021 year has been booked in advance, and they have received payments from the price of the vaccine, which makes them in a better financial position.

Continued increase in activity in the food sector

Food is one of the essential commodities that cannot be dispensed with, and the Corona pandemic has significantly affected the incomes of not a few segments of the poor and middle classes in the world, and this was a reason to reduce their consumption of food demand.

However, food demand statistics indicate that after the removal of the embargo threat and the removal of obstacles to supply lines and supply at the level of global trade, food exports worldwide achieved a gain of 4.6% during the first half of 2020.

The demand for food will increase in 2021, and the food production sector remains in an active state to meet the demand. The Corona pandemic has resulted in the entry of food processing service for students through families and families at home, to compensate for the unemployment situation that afflicted members of these families and families.

Reducing aviation losses

Aviation was one of the largest and fastest-growing economic sectors that suffered significant losses due to the Corona pandemic. In the second quarter of 2020, the estimates went to the aviation sector’s losses of about $ 300 billion, and an estimated $ 550 billion in debts to airlines, and a large proportion of its employees were laid off, and some airlines and companies associated with providing their services to this sector went bankrupt.

But the production of vaccines from more than one country, and the need for all countries of the world, will help stimulate air traffic in distribution flights, and the accompanying economic activities to serve the aviation sector from insurance, shipping and cooling companies, and hotels to bring workers in the aviation sector.

The International Air Transport Association estimated the decline in travel demand by 88% in September 2020, compared to the performance of the same month of 2019, but some claim that the presence of the vaccine will change the movement of travel demand, especially after the passage of the first quarter. From 2021, when the handling of the vaccine will be greatly expanded, and it has become a living reality, people are assured of the safety of the vaccine and the absence of side effects for it.

However, commercial flights will be predominant during at least 2021, and therefore some estimates have indicated that air freight revenues in 2021 will reach historic levels – due to the transportation of vaccines and related activities – of $ 140 billion.

Limited hopes for the tourism sector

Expectations go to the existence of a conditional improvement in the tourism sector in 2021, if safe openness is achieved, after the arrival of vaccines to large sectors around the world, to stimulate travel for various purposes. It is known that tourism was one of the sectors most affected by the Corona pandemic.

According to the estimates of the World Tourism Organization, the losses of the tourism sector may exceed one trillion dollars directly, and the economic losses of the global GDP due to the decline of the tourism sector will be around two trillion dollars. The Asia region was the most in the world in terms of declining tourism movement by 82%, then the Middle East by 73%, then Africa by 69%, then Europe and the Americas by 68%.

There is an important activity within the tourism and service sector, which is the restaurants and cafes sector, especially in countries that deal with the Corona pandemic seriously, as restaurants and cafes have been severely affected, so weekend days are no longer the top of the activity of these facilities, as they were before, because most countries It imposed a complete ban in those days.

The absence of the human dimension

Vaccines have been found to confront Corona, which is a commendable humanitarian effort, and rich countries that are able to obtain the necessary quantities to secure their citizens competed, but there are not few segments of people who cannot obtain these vaccines, because the price exceeds their financial capabilities, as well as that their poor countries do not You have the financial capabilities to purchase it and make it available to everyone.

The people of poor countries were the victims of this pandemic, as the virus began in China, then spread to the world, and its negative consequences were for poor countries to increase the rates of poverty, hunger and unemployment in them, and these peoples did not find anything to compensate for these damages.

If there is a role for international organizations during the year 2021 in light of this pandemic that is hitting all countries of the world, then let it be in providing vaccines in an urgent and safe manner to the poor people, and not exploiting their need by the monopolists and corruption, whether at the local or international level.

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