To say the last year has been challenging for businesses and investments would be an understatement. The COVID-19 pandemic has exerted pressure on the world’s economies, and it cut the wealth of many investors.
Initially, analysts estimated major economies would lose 2.9 percent of their gross domestic product (GDP) over 2020. They later revised the estimate to 4.5 percent. While these figures are grim, they are not lasting. In fact, the world economies are ready to rebound with a boom.
Positive economic signs abound. The global markets are currently on an upward trajectory, and the volatility in the financial markets is at its lowest since the pandemic hit in early 2020.
There’s more confidence among investors who now bet on economic tranquility and are ready to ride a wave of optimism generated by changes in the US political and economic systems. On Wall Street and in Washington, attention is shifting to an intriguing if indistinct prospect: a post-COVID boom.
If you’re an investor, it’s time to sit up and pay attention. The post-COVID boom is real and offers growth opportunities for your investment portfolio.
The post-pandemic boom is a supercharged rebound of the global economy that is bringing down unemployment, boosting wages, and encouraging years of stronger growth. A synchronous global recovery is one feature of the post-pandemic boom. This development offers investors across the globe immense opportunities. One indicator of the post-pandemic boom is that the IMF raised the global GDP growth forecast to 6 percent from its prior estimate of 5.5 percent.
Historically, once a crisis has passed, consumer spending increases. While things are tough, consumers hold on to their money. As conditions ease, they put their money back into circulation. Often, the public demands a crisis response from the government, which may take the form of a stimulus package or increased government benefits.
There’s also increasing consumer demand for more responsible corporate governance and equitable, sustainable growth. All these factors see more injection of money into the economy, which spurs a financial upswing.
After a devastating crisis such as COVID-19, consumers risk more in order to recover, which creates a boom in the markets. Investment in social responsibility also increases in the post-crisis period.
Financial experts note that this recession was not a normal one and will leave lasting scars. For instance, employment rates are still higher than they were pre-pandemic and the number of people in poverty is disturbing. Happily, the recovery is expected to match the speed of the economic decline, so things are improving rapidly.
Not all world economies will recover at the same rate. China has already exceeded its pre-pandemic growth numbers. The US GDP grew by 6.4% in the first quarter of 2021. Most major economies are expected to reach their pre-pandemic growth by year’s end, although Germany and the UK may lag. Asian markets are poised to do well, as are emerging markets. And while global unrest is always an economic wildcard, at present, the boom looks strong.
Forecasts for unprecedented growth have been around since the encouraging news of a COVID-19 vaccine. Increased growth had to happen as businesses reopened and people resumed normal activities. But the projected growth over the last few months points to a post-pandemic boom. As an investor, prepare yourself to leverage the emerging opportunities.
Sign up and invest with SmartWealth to get a head-start on investing during this post-pandemic boom.