Virus & vaccine setbacks push back timing of recovery

The world economy lost considerable momentum in the first quarter as resurgences of the virus and tighter lockdown measures weighed on activity. The lesson from Q4 last year was that households and businesses have adapted to lockdown measures to a significant extant and most industrial sectors have remained open for business, so individual economies should avoid large falls in output. But while the latest data show that the recovery in the US is being supercharged by a combination of fiscal stimulus and relaxation of restrictions, for much of the rest of the world, vaccine setbacks and worsening virus outbreaks will delay economic recoveries. The surge in virus cases in India has grabbed attention in recent weeks, but infections are on the rise in most parts of the world, especially in emerging economies.