Are we in economic recovery after COVID? Let’s find out

As of the writing of this article, it has been seven months since the start of the pandemic. As the world was locking down, things looked grim for the world economy panorama. But recent assessments of the World Economic Outlook (WEO) paints a better picture. This leaves us with one question: Are we in economic recovery after COVID?

The economic panorama seems to be less dreadful than previously expected

In a recent press briefing, IMF Communications Department representative, Gerry Rice spoke about the pandemic long term economic effects. The message gives hope that an economic rebound after COVID could be on its way.

When asked about the effects of a second wave of what COVID infections could mean to the global economy, he stated that it is not as dark as previously thought.

“What I can say today is that recent incoming data suggests that the outlook may be somewhat less dire than at the time of the World Economic Outlook (WEO) update on June 24th with parts of the global economy beginning to turn the corner.” stated Gerry Rice.

He then emphasized that we are still not “out of the woods”. There might be signs of an economic recovery after COVID, but the outlook remains somewhat challenging.

How to measure economic recovery?

In an investigation by FiveThirtyEight, economists were asked how they evaluate economic recovery after COVID. This is a short list of the items they take into account:

  1. By following closely the changes in the GDP and contrasting them with previous estimates.
  2. By comparing the unemployment rate.
  3. Monitoring retail and food sales, including e-commerce.
  4. Surveying for consumer confidence.
  5. By checking the saving rates of the population.

Economists are able to give an accurate estimate on the economic growth of a country, or the whole world, by taking these five metrics into consideration.

How long does economic recovery take?

Time is a bit trickier to have an idea of. In Mexico, the economic growth after COVID has been greater than what INEGI previously projected. The Global Indicator of Economic Activity (IGAE) showed an expansion of 5.7% compared to the previous month. Analysts originally estimated this development to be of 5.2%.

In other words, the economic development after COVID in Mexico has been steady.

“Generally speaking, the real GDP had an accumulated drop of 20.9% during (the period of) February – May, yet it had an accumulated growth of 15.0% in June – July. Therefore, in July the real GDP was a 9.1% below the level previous to COVID,” stated Alberto Ramos, Goldman Sachs analyst.

Even though the Mexican economy is still 9.1% below compared to 2019, it is still less than the 10% that was actually projected for this point in time. This shows great signs of an economic recovery post pandemic for the Mexican market.

In times like these, it is important to bring your company to a country that shows promise on having an economic recovery. Thus, here at VYNMSA we would like to assist you in settling in Mexico.

With over 25 years of experience, we are one of the leading industrial real estate developers in Mexico and have delivered over 400 projects to fully satisfied customers. Also, we are fully equipped to assist you in developing your BTS projects, with lease and sale solutions that always have a win-win approach. We also have around 20 inventory buildings ready for immediate occupancy, which is a total space of 1.5 million SqFt across Northeast and Central Mexico.

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Phone: +528122028599

Source: Reuters, IMF, INEGI, Bloomberg, FiveThirtyEight

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