Global recovery is going faster than expected. What’s next?

The global economy is recovering rapidly. Most economists think that this year’s rebound from the coronavirus plunge will go at a pace not seen since the 1970s. In most major economies, strong momentum is already building. Still, such optimism is due mainly to the accelerated vaccinations, along with massive liquidity injections and unprecedented fiscal support. The governments are also speaking about the adaptation of economic activities to overcome current subdued mobility.

According to the latest surveys, analysts expect the U.S. to make the fastest annual economic expansion since 1984 and China to return to pre-crisis levels this year.

Janet Henry, the chief global economist at HSBC, noted that a synchronized global economic rebound is underway. This is, despite the continuing battle against coronavirus pandemic. She added that every economy they cover is projected to register a meaningful recovery in annual average GDP growth this year.

However, there are many factors to consider. Much will depend on whether countries choose a strategy of eliminating or just suppressing the pandemic.

Last year, the pandemic pushed the global economy into its deepest-ever recession. However, new data showed a sharp rebound. Analysts forecast the economy to grow on average 5.9% this year.

What happens after the pandemic ends at last?

While the numbers are promising, recovery after the coronavirus pandemic is behind us won’t be as easy as it seems. Companies are eager to open their doors to vaccinated consumers, but they are having trouble finding workers. That means customers should expect delays in service, longer wait times, and higher prices overall, according to labor economists.

The worker shortage is hitting the majority of businesses, from travel to restaurants to manufacturers, as they try to hire back after historic layoffs during the Covid-19 pandemic lockdown. As a result, the companies are struggling to meet rising consumer demand.

Austan Goolsbee, the economics professor at the University of Chicago Booth School of Business, warns to expect worse service in affected industries: retail, wait times at restaurants, housing renovations, and the like. Meanwhile, job seekers say employers in the post-lockdown job market are offering too low wages.