Global Economy Poised to Sizzle, but Many Countries Will Just Fizzle

• 2 min read

Global of the world with bright lights around.
Thanks to vaccines and good monetary policy, U.S., China and Europe should lead what is shaping up to be stellar year for global growth; unvaccinated nations will be left behind.

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Global of the world with bright lights around.

The global economic outlook remains bright, but recovery from the pandemic will not be entirely synchronized. Vaccination programs and monetary-policy responses vary widely from country to country; some are much slower than others. About a year ago, AMG presented its paradigm for evaluating opportunities and risks in the global economy. The inter-related components of healthcare, policy response and financial markets were examined.

First, AMG looked for countries that could adapt to the COVID-19 crisis and adequately treat their sick, access therapeutics and develop vaccines. Next, AMG evaluated a country’s flexibility in fiscal and monetary policy to provide both a bridge to the other side of the pandemic as well as stimulus in recovery. Finally, AMG assessed whether a nation’s policy responses would be quick and adequate enough to allow companies to weather the pandemic and generate profits in recovery.

The results indicated that the United States, China and Europe would emerge from the pandemic in the best shape and offer investors the most opportunities. To date, this view has played out: U.S. and European stock markets are at all-time highs, and China’s equity market led the global-equity recovery for most of 2020.

Going forward, those three economic giants will continue to pace the recovery. Despite setbacks such as Europe’s slow vaccine rollout, the global economy will likely be booming in the second half of this year. But the surge will be uneven. Many countries still lack access to good vaccines and/or adequate policy responses. They will continue struggling and probably not participate in what is expected to be a spectacular year for global growth—the best since 1980.

This information is for general information use only. It is not tailored to any specific situation, is not intended to be investment, tax, financial, legal, or other advice and should not be relied on as such. AMG’s opinions are subject to change without notice, and this report may not be updated to reflect changes in opinion. Forecasts, estimates, and certain other information contained herein are based on proprietary research and should not be considered investment advice or a recommendation to buy, sell or hold any particular security, strategy, or investment product.

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