The Path out of the Pandemic and the Future of Work

January 28, 2021
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Information is power. As part of our ongoing efforts to provide you with relevant and important market information, please find an update from our international partner, Knight Frank, and our President and Chief Operating Officer, Scott Durkin.

The two camps of Covid


The path out of the pandemic

The International Monetary Fund yesterday pushed up its forecast for global growth this year to 5.5%, reflecting expectations of a "vaccine-powered strengthening of activity" later in the year and additional policy support from a few large economies.

The strength of the recovery is projected to vary significantly across countries, depending on access to medical interventions, effectiveness of policy support and exposure to viral spillovers from neighboring countries. In nations with access to vaccines, the organization expects the softening we've seen in early 2021 to give way to more positive momentum in the second quarter, while the virus is expected to be brought to low levels everywhere by the end of 2022.

Major central banks are assumed to maintain their current policy rate settings throughout the forecast horizon to the end of 2022 and as a result, financial conditions are expected to remain broadly at current levels for advanced economies.

Keeping score

The full IMF report enables us to keep score as to when economies are likely to reach their pre-pandemic size - Bloomberg has charted it neatly here. Both the US and Japan are projected to regain pre-pandemic activity levels in the second half of 2021, while the UK and euro area are expected to remain well below that milestone into 2022.

The 2% upward revision in the outlook for the US relative to the IMF October projection was largely reflective of the stimulus package signed in December. China's economy is expected to grow 8.1% this year following effective containment measures, and the IMF India revised up India's outlook for the year to growth of 11.5%, reflecting carryover from a stronger-than-expected recovery in 2020 after lockdowns were eased.

Future of work, continued

The heads of the world's largest banks have had their say on how remote working is progressing at a virtual meeting of the World Economic Forum. Common themes are emerging, with executives broadly praising the set up over shorter periods, while stating it is increasingly weighing on collaboration and culture over the longer term.

Adding to the debate over how all the pandemic is likely to be reflected in the design of the office, the New Yorker has this long read charting the path from cubicles, to open plan, to the pursuit of a handful of companies to find a successful middle ground.

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