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Accelerated Policy Emphasis on Clean Energy, Digitalization, and Infrastructure Development
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The COVID-19 pandemic pushed the global economy into a deep recession in 2020, with recovery underway. While economic parameters are improving, the pandemic has brought about transformative shifts in government policy, industries, and the business environment. This research provides insights into the new policy priorities of governments to build resilient economies, medium-term growth expectations for major economies, and the transformative changes in the global trade, supply chains, and workforce landscape.While the global economy contracted in 2020, some economies continued to exhibit strong resilience. In Q2 2020, contraction in the German economy was weaker compared to Western European counterparts such as Italy and Spain, which are more reliant on tourism. The higher sensitivity of the tourism sector to the pandemic-induced national lockdowns, travel restrictions, and vaccine inequity could delay the recovery process in tourism-dependent economies. The United States’s latest $1.9 trillion stimulus package has helped boost US growth prospects significantly, although the highly infectious Delta strain brings some uncertainty to the economic landscape.Government vision and policy plans until 2030 indicate a greater focus on infrastructure development, digitalization, and accelerated transition to clean energy. Among the industries being promoted by the governments of major economies, digital infrastructure, clean energy, and electric vehicles are common focal areas. Fiscal policies in these countries show increasing tax and subsidy support for electric vehicles.Recovery following the severe impact of COVID-19 on global trade and supply chain disruptions has been faster for goods trade compared to commercial services trade, with transport and travel services being particularly affected. The pandemic has also led to major trade and supply chain shifts. For example, just-in-time inventory strategies are expected to be complemented by just-in-case strategies for better future-proofing. Given the disruptions in global supply chains, trends such as localization, reshoring, and production and supplier diversification will gain prominence. The pandemic has also resulted in a significant change in the workforce. Remote working solutions are now vital, with remote and hybrid work models poised to extend post-pandemic, especially in higher-income countries. The gig economy will continue growing and increasingly expand into higher-skilled occupations.The research also summarizes key growth opportunities tied to global transformative shifts.
Key Issues Addressed
Author: Neha Anna Thomas
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