(Newswire.net — September 30, 2021) — As the world struggles to recover from the pandemic, some analysts have started to express a more positive forecast for the recovery of the global economy. After all, many countries have made great progress in their vaccination efforts and have reopened their economic and industrial activities.
But a more realistic outlook may be a little less positive that, and institutions like the International Monetary Fund have warned that recovery from Covid could go grong for the global economy. Moreover, the difference between developed and emerging markets is stark: while advanced markets have had improved forecasts, expectations for developing nations have not been positive.
“The economy in 2021 seems to be characterized by recovery, but my long-term outlook is not as optimistic as current data might suggest. We are in a situation in which in most of the major economies of the Western world, States are still intervening with subsidies and extraordinary measures: consequently, we do not have an objective picture of the situation, especially from an employment and social point of view,” analyses Joao Vale e Azevedo, Chairman of KUNST Global, one of the largest equity firms in the world.
KUNST Global makes investments in several areas including energy, commodities, telecommunications, property, tourism, fashion, retail and entertainment; and in buyout and development capital.
Azevedo stresses that it’s hard to know what will happen once the storm passes, but a quick and painless recovery remains doubtful. The major issue is lack of planning: some areas such as entertainment, hospitality or tourism itself have not only suffered radically but will be forced to rethink their entire business model. These changes may bring positive results, but for some, losses will be inevitable.
“Many small businesses, or family businesses, will not survive. It will be said that, up to this moment, the system has held up but we forget that competition at the moment is distorted by state intervention. Governments throughout the West have intervened heavily, as has never happened in decades now, to support the economy by altering the free market,” adds Azevedo.
This is one of the reasons why the stock market, especially the American one, has recovered and indeed now sets record after record. But it’s important to remember that the real economy and the stock market are two different things.
However, this more grounded forecast does not mean there is no hope for change. According to the chairman of Kunst Global, if governments support entrepreneurs and business, we may be able to turn the crisis into opportunity, in ways that we cannot even imagine at this time.