Signs of recovery are welcome, but the global economy is still on course for a crash
- The upturn in trade and job numbers and positive market sentiment are fuelled by the generous stimulus that policymakers will need to maintain at all costs
- While the illusion of plenty lasts, a sustainable economic recovery built on business and consumer confidence must take root
You would never think that, in the thick of a global pandemic crisis, a new-found sense of stability and recovery could be returning to the world. But there are glimmers of economic recovery in global demand, stock markets are no longer in free fall and are clawing back good gains, and market fear factors are in retreat, too.
It may not seem apparent to ordinary folk still suffering dire consequences of the coronavirus but the bounce back in financial markets is helping to lead the way back towards revival. Emerging markets are rallying, higher-beta stocks are in demand and risk appetite is gaining ground.
If any better proof were needed that economic recovery is under way, the latest data from the world’s two largest economies, the US and China, are showing encouraging signs of progress. In July’s US non-farm payrolls report, employers returned nearly 1.8 million people back into work, after 2.5 million and 4.8 million jobs were restored in May and June, proof that the economy is heading back into a stronger space after the lockdowns, lay-offs and shutdowns.
