The COVID-19 pandemic significantly impacted the world economy. From the early days of the pandemic, it became clear that the degree to which it would affect the economy was likely to be significant.
However, what was not clear was how quickly and thoroughly the economy would recover post-pandemic. Although there isn’t a consensus on this topic yet, according to a number of accountants, a strong economic recovery may be on the horizon sooner than some might have expected.
The Association of Chartered Certified Accountants and the Institute of Management Accountants recently released findings from the most recent quarterly Global Economic Conditions Survey. This survey polls more than 1,000 well-respected accountants and financial experts on a variety of topics related to the global economy. Based on the results of the survey, most accountants appear to believe that, if trends continue, within the second half of 2021, the global economy will generally return to pre-pandemic levels.
Of course, numerous factors can influence whether this prediction proves accurate. For instance, the rise of the Delta variant has slowed the end of the pandemic. If it is not properly controlled, the economy’s recovery may also slow. There are also fears that inflation may have a negative impact on how quickly the economy returns to normal. That said, not everyone shares these concerns to the same extent.
Michael Taylor, chief economist at ACCA, states “To a large extent, the rise in inflation will be temporary, the result of collapsing demand last year, followed by a strong rebound that has resulted in rapid increases in commodity prices and supply shortages in some sectors. The rise in inflation can therefore be seen mainly as a welcome reflection of a strong recovery in demand that has resulted in supply shortages and a rebound in commodity prices, both of which are likely to prove temporary. For now, at least, underlying inflationary pressures are generally subdued.”
The regions in which survey participants live and work also appears to be a factor influencing their concerns regarding inflation. Generally, participants in Western Europe expect only a modest increase in inflation. However, a small but apparently vocal minority of respondents in North America are much more concerned.
It’s also worth noting that economic recovery throughout the world has been inconsistent. For example, the reason for the overall recovery has primarily been the fast and substantial recoveries in the United States and China, the largest two economies in the world. In some other countries, recovery has come much more slowly.
Most experts naturally credit the emergence of COVID-19 vaccines with spurring the economic recovery. They also state that lack of access to vaccines in certain parts of the world accounts for the disparity in economic recoveries.
According to Raef Lawson, vice president of research and policy at the IMA, “Buoyant housing markets have supported consumer spending. This means that as economic conditions move toward normalization, economies are likely to recover very rapidly. In many emerging markets, vaccinations have made little progress, leaving them vulnerable to renewed waves of COVID-19 and variants with consequent restrictions that curtail economic recovery. This pattern seems likely to persist well into 2022.”
Again, it’s too early to tell if the optimism of these professionals is valid. That said, if trends continue, it’s likely the economy will remain fairly strong.