The long road to economic recovery

The announcement of the effectiveness of one of the vaccines being developed against Covid-19 stimulated markets this week, although experts predict a slow, unstable and irregular economic recovery.

The heads of three central banks were cautious about the optimism surrounding the drug from US company Pfizer and the German BioNTech, which announced advances in investigations caused a rise in oil prices and stock indices.

The president of the Federal Reserve of the United States, Jerome Powell; the president of the European Central Bank, Christine Lagarde; and the Governor of the Bank of England, Andrew Bailey; agreed in a videoconference on Thursday that a vaccine alone is insufficient to boost the economy.

Although economists applauded the scientific advances of the drug to prevent the spread of the SARS-CoV-2 coronavirus, which causes Covid-19, they considered it hasty to assess the implications of the news on the course of the global economy, especially in the short term.

Amid the increase in infections in the United States and Europe, the three officials warned about the need for governments and central banks to support large-scale stimuli to avoid unemployment and lower corporate loans.

Until there is a vaccine, there is great uncertainty about what may happen, the directors indicated.

After the fall of the economies in the first nine months of the year, the last quarter of 2020 should serve as a turning point for recovery, but the outbreaks of the disease in various countries, with their respective restrictive measures, raise doubts about this process .

According to the specialized site Business Insider, the positive effect of the coronavirus vaccine will affect global economic forecasts starting the second half of 2021 and in 2022, as the Pfizer vaccine is still under study, as well as 40 others worldwide.

The existence of a drug will initially affect consumption, savings, investment and tourism, according to the source, but it is still difficult to predict when that will happen.

Raghuram Rajan, former head of the International Monetary Fund (IMF), predicts that the impact caused by Covid-19 will take a long time, regardless of the existence of a vaccine.

The delay in growth is influenced not only by the discovery of a drug capable of slowing the spread of the coronavirus, but also its distribution, which may take time due to the logistical complexity of the process.

When an effective vaccine is finally obtained, that will be the starting point of a stabilization process for countries both in health and economics, a stage for now scheduled for mid or late 2022.

Meanwhile, only the expectation of a possible remedy to avoid the contagion of Covid-19 already generates optimism, hope and an upward movement of the markets after a year under the shadow of the pandemic.