The announcement of more than one coronavirus vaccine has led the world to a state of optimism about economic performance and the return to normalcy. But recent media reports about the second wave. The mutation of the virus and the emergence of new strains have led to a complete shutdown in a number of countries in Europe and even in some Arab countries.
But scientific efforts in the face of the virus led the world to break the pessimism about economic and social life. And this in itself is a positive factor. But the equation in its origin has not changed for the entire economic situation, where medical scientific efforts are still the independent variable in the equation and the economy in its various aspects.
This is evidenced by the IMF’s October 2020 global economic outlook. which downgraded the pessimistic outlook for the end-2020 World GDP estimate to negative 4.4%, from negative 6% previously.
However, the improvement in the IMF’s estimate of GDP performance in 2021 to 5.2% would be exceptional. As the fund’s medium-term forecast for global GDP – 3 to 5 years would be 3.5%, due to the negative build-up from the great shutdown from January to April 2020. Resulting in higher public debt, corporate bankruptcies, and increased poverty rates.
The optimism expressed by the news of the production of multiple vaccines in more than one country has led to expectations that some sectors will improve in the service of providing these vaccines to the beneficiary countries. And will lead to expected changes in the nature of economic and social life. So, there will be beneficiaries and those affected by the performance of the world economy in 2021. In light of the challenge of Increasing profits in the pharmaceutical and medical care sector Since the first moments of the corona pandemic, the profits of companies operating in the pharmaceutical and healthcare sector have tended to increase at significant rates. Due to increased consumption of sterilizers and masks, as well as increased demand for medicines for chest diseases, immune suppression, or hospitalization.
With the entry of the second wave of coronavirus in October 2020, precautionary measures have returned in large segments of society. Resulting in increased consumption of sterilizers and the use of protective tools, such as masks, disinfectants, etc., Which means continued production lines, increased production volumes. And thus, increased sales and profit ratios for companies involved in the production of these supplies globally.
However, companies producing coronavirus vaccines will be the big winners in 2021 and beyond. Because they are in a monopolistic light, especially since their entire 2021 production has been pre-booked and received payments for the vaccine. Which puts them in a better financial position.
Continued increased activity in the food sector. Food is an indispensable commodity, and the corona pandemic has significantly affected the incomes of not a few segments of the world’s poor and middle classes, reducing their consumption of food demand. However, food demand statistics show that after the threat of embargo and the removal of supply and supply line barriers at the global trade level. Global food exports generated a profit of 4.6% in the first half of 2020.
Demand for food will increase in 2021, and the food production sector remains active to meet demand. Resulted in pandemic-Cov entry into service of food processing applicants through families and families in homes, to offset the unemployment that has affected members of these families. Reduce flight losses Aviation was one of the largest and fastest growing economic sectors that suffered significant losses due to the corona pandemic.
In the second quarter of 2020, it was estimated that the losses of the aviation sector would be about 300 billion USD. Accumulated debts of about 550 billion USD on airlines, a large proportion of its employees were laid off, and some airlines and companies associated with providing services to this sector went bankrupt. But the production of vaccines from more than one country, needed by all countries of the world, will help to stimulate air traffic in distribution flights, and the accompanying economic activities to serve the aviation sector from insurance, shipping and refrigeration companies, and hotels to recruit aviation workers.
The International Air Transport Association (IATA) had estimated an 88% decline in travel demand in September 2020, compared to the same month in 2019. But some argue that the presence of the vaccine will change the movement of travel demand. Especially after the first quarter of 2021, where vaccine use will have expanded significantly and become a reality, reassuring people
However, commercial flights will prevail at least through 2021. So, some estimates have suggested that air freight revenue in 2021 will reach historic levels-due to vaccine transport and related activities – of 140 billion USD. Limited hopes for tourism sector the expectation is that there will be a conditional improvement in the tourism sector in 2021. If safe opening is achieved, after vaccines reach large sectors globally, to stimulate travel for various purposes.
Tourism has been one of the sectors most affected by the coronavirus pandemic. According to estimates by the World Tourism Organization (UNWTO), the losses of the tourism sector could directly exceed 1 trillion USD. And the economic losses of world GDP due to the decline of the tourism sector would be in the order of 2 trillion. Asia was the largest region in the world with 82% decline in tourism traffic, followed by the Middle East with 73%, Africa with 69%, and Europe and the Americas with 68%.
Restaurant and Cafes
There is an important activity within the tourism and service sector, which is the sector of restaurants and cafes. Especially in countries that are dealing with the corona pandemic seriously, where restaurants and cafes have been severely affected. And the weekend days are no longer the peak of activity of these establishments, as before. Because most countries impose a complete ban on those days.