Last week, Trump declared the coronavirus defeated. In turn, the Chinese labelled the stock market rally as a ‘healthy bull market’. And look, when I write this column, investors are swallowing it all. Share prices rise again quickly, the letter ‘V’ rules: Victory over the Virus, a V-shaped economic recovery and regularly flickering hopes for a Vaccine.
The latest economic data are undeniably good. Often above expectations even. In May, for example, retail sales in the eurozone were barely 5 percent below those of last year. There is a good chance that in June the damage will be undone, despite differences between nations that have been more or less affected by the corona crisis. But overall, the recovery does indeed appear to be V-like.
However, let’s not jump to conclusions as recovery certainly isn’t a reality yet. The American, Brazilian or Indian virus curves are both logical and known illustrations of this. Or look at some figures from the IMF. In January, this institution expected that GDP per capita would increase in 160 countries in 2020. That has been adjusted to a decrease in 170 countries. As long as this has not recovered, the ‘V’ isn’t complete yet.
Now, the size of an economy is one thing, quality is another. Perhaps the coronavirus can ultimately yield something positive in that qualitative domain.
First at the micro level. From March we all took a speed course in digital working. Successfully. Which perhaps makes it less logical or necessary to be in a traffic jam every day. Many people have experienced this as something very positive in their personal lives. If we continue on this road, the environment will experience the same.