COVID-19 sucker-punched the world’s economy in a way that hasn’t been seen for generations, and businesses have had to deploy a lot of resources to stay afloat. And much has changed ever since 2019. However, the damage to human lives and national economies is still very relevant today, particularly in developing nations.
The World Bank expects the global economy to expand by 5.6% this year. Despite the expectations of a robust post-recession recovery, the rebound will likely be uneven across nations. Major economies will set the stage for recovery, while emerging ones are expected to accelerate growth rates to 6% this year.
However, for low-income economies, this stage represents the slowest economic expansion in the last twenty years.
Some industries have found ways to bounce back, carving a path around current limitations and realigning their goals. Sectors like healthcare, renewable energies, and telecommunications are all thriving. Though the S&P500’s recovery was largely dominated by large-cap tech stocks, other businesses are also redirecting their efforts to keep things running. With the pandemic putting pressure on the systems around us, people have begun investing in the new world.
Rapid Reallocation
Plummeting markets pushed investors into a primarily risk-off mentality, pulling capital out from riskier investments and redirecting it to (perceived) stable holdings. In terms of risk tolerance, investor risk/return expectations have changed dramatically, especially concerning factors like liquidity, price stability, and long-term value. Businesses have had to adapt to remote working requirements, causing a general shift in how companies approach work.
