The new crown virus has not yet been tamed, analysts say they need to reset world economic expectations

The new crown virus has not yet been tamed, analysts say they need to reset world economic expectations

   Recently, as scientists There have been more and more warnings that the road ahead is long and difficult. Analysts pointed out that investors who expect the new crown vaccine to save the world economy in 2021 need to adjust their expectations.

   The new crown crisis triggered the worst economic recession since the Great Depression. Although pharmaceutical companies have made progress in finding a cure for the disease, people still have questions about the effectiveness of the first wave of vaccines and how much People are willing to be vaccinated. In addition, how to distribute the vaccine to more than 7 billion people worldwide is also an extremely difficult issue.

  The future of the world economy depends on the answers to these questions, because the new wave of epidemics means people’s health concerns, and governments will continue to implement lockdown measures and restrict business activities.

  Manulife Investment’s portfolio manager Chris Chapman said that even if a successful immune system emerges, it will not immediately become an economic panacea. Manulife Investment manages more than $660 billion in assets.

   “In terms of actually returning to the growth trend before the new crown epidemic, it may take more than a year.” Chapman said. “The recovery time will be postponed, but it is still expected that a vaccine will be developed sometime next year.”

   For decades, the world economy has relied on central bankers and finance ministers to escape the crisis. , If the right amount of capital is injected into the economy, the economy will eventually recover. However, this time is different. While investors are paying attention to the stimulus plans issued by governments, they are also paying attention to the data of vaccines and treatment trials, looking for signs of hope. The longer the search for an effective vaccine, the slower the economic recovery will be.

   It is certain that scientists may still make major breakthroughs in the short term. If even only a small part of the population is vaccinated, it may have a major impact on the return to daily life. The savings accumulated by households and businesses in 2020 will be released in 2021.

   Pfizer said this month that the company may seek emergency use of the vaccine in the United States with its German partner BioNTech before the end of November. Another company, Moderna, which is in a leading position in the competition, is also considering that if the vaccine has a good mid-term effect next month, it may also apply for an emergency license this year.

   Professor Neal Ferguson, a public health scholar at Imperial College London, said, “It is very likely that by the end of spring, there will be enough vaccines to protect the most vulnerable groups.”

   “But at least until then, unfortunately, life will still maintain a balance between reopening society and controlling the virus.” He added.

  Scientific issues can also slow things down. Johnson & Johnson suspended clinical trials of the new crown vaccine this month after a participant fell ill. A few weeks ago, AstraZeneca and Oxford University also stopped research for the same reason. On Friday, both companies announced plans to resume trials in the United States.

   The recent progress of effective treatments that can help economic recovery is mixed. On October 22, local time, Gilead Sciences’ highly acclaimed antiviral drug Remdesivir was approved by the U.S. Food and Drug Administration, becoming the first officially approved new crown treatment drug in the United States. And just a week ago, on October 15, local time, the WHO released the interim results of the “Solidarity Trial”: Therapies such as Remdesivir seem to have little or no effect on the 28-day mortality of hospitalized patients or the course of hospitalization for new coronary patients. No effect.

   In addition, even if an effective vaccine is found, logistics and distribution will mean that work, travel and leisure will still be disrupted. After all, only a small number of people are expected to be vaccinated the first time.

   All these problems have caused trouble for global economic growth, although data from the United States and the Eurozone this week may show that the global economy rebounded strongly in the third quarter, not as people once feared. serious.

   However, with the approach of winter in the northern hemisphere, the risk of virus transmission has also increased, and the V-type recovery has long been a thing of the past. Economic data evaluations have shown that economic activity in many industrial countries weakened in October, especially European countries.

   Former Federal Reserve Chairman Greenspan said last week that the new crown epidemic will become a major uncertainty factor for the US economy. The virus will appear periodically in some form in the future, and it will be different every time.

   A recent study showed that in the long run, the U.S. economy alone will experience “huge and lasting negative effects,” whose impact will exceed short-term shocks, partly because this virus means the public More disturbed.

   “This crisis was not a financial crisis at the beginning, but it is evolving into a major economic crisis with very serious financial consequences.” World Bank Chief Economist Carmen Lein Hart said: “There is still a long way to go.”

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