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Global Recovery Tracker: Q4 2020

December 2020

The coronavirus (COVID-19) pandemic has triggered the most severe global recession since World War II. In Q4 2020, the end of the pandemic started as countries began administering effective vaccines among the population; however, vaccine distribution and scepticism risks remain. In this context, Euromonitor International has developed the Global Recovery Tracker to help businesses track and predict when activity in key markets will recover, so as to plan their strategies accordingly.

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Key Findings

The spread of COVID-19 continues to accelerate in Q4 2020

The end of 2020 is seeing the emergence of regional second waves, especially in Europe and North America. The Eurozone and UK economies have had to resort to new lockdown measures to control fast-rising infection rates. The baseline forecast assumes these second waves are contained in Q4 2020, and widespread vaccine deployment occurs around mid-2021.

Russia, the UK and the US are the first countries to start distributing vaccines

Already, before mid-December 2020, Russia, the UK and the US will have started distributing vaccines. The EU is likely to follow soon. The vaccines will initially be administered to medical staff and the most-at-risk population groups. The start of vaccine distribution is the start of the end of the pandemic, which is already in sight; however, major logistical hurdles to global vaccine distribution remain.

The US and German economies are expected to recover by the end of 2021

Economic recovery is likely to be swift once the social distancing effects fade. Therefore, we expect economies to start fully recovering as widespread vaccine distribution (which is assumed to be implemented around mid-2021) creates herd immunity. As the probability of widespread vaccine distribution in 2021 rises, so the economic outlook will improve.

Consumers continue to cut back on spending

Social distancing and lockdowns continue to negatively impact the retail sector, as individuals cut back on their in-store shopping. On top of this, uncertainty about the path of the pandemic continues to make individuals wary about spending on big ticket items, and raises precautionary savings. From high-frequency indicators, we see that these effects increase with the current rise in infections; however, not to the same magnitude as during the first wave of the pandemic.

 

Introduction

Scope
Key findings
Key events so far (1)
Key events so far (2)
Only partial recovery expected in 2021
Global economic outlook remains tilted towards downside risks

Euromonitor Recovery Index

The Recovery Index
Index ranking based on Q4 2020 scores: 1 to 10
Index ranking based on Q4 2020 scores: 11 to 20
Index ranking based on Q4 2020 scores: 21 to 30
Index ranking based on Q4 2020 scores: 31 to 40
Index ranking based on Q4 2020 scores: Remaining countries
Recovery landscape in Q4 2020

Overview of Major Economies

Prospects of recovery are uneven
Activity in services sector adversely impacted by new lockdowns
Deteriorating labour market conditions
Consumer spending yet to recover in most countries
Retail sales recovery is underway
Consumer confidence remains low

Country Insights

Brazil: resumption of consumer spending may promote recovery
China: further recovery will be driven by consumer spending
Germany: a slight improvement from the previous quarter
India: a COVID-19 spike hinders recovery progress
Japan: positive and negative developments offset each other
US: slowing recovery but consumer confidence improving
US: activity levels decline in a second wave but at a lower rate
UK: economy hit by lockdown and increased Brexit uncertainty

Conclusion

A slower recovery is now more likely
Key country insights
Outlook

Appendix: Index Methodology and Definitions

Recovery Index Methodology
Recovery Index Indicators and Weights
Scenario assumptions and definitions
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