Despite the promise of vaccine rollouts, the continued economic uncertainty driven by further lockdowns means the global economy is still estimated to be 5% smaller at the end of 2021 than if the economy continued to grow at pre-pandemic forecasts. This represents a gap larger than the size of the German economy.
Given this outlook, Accenture Strategy has calculated that US$7 to US$9 trillion in additional fiscal support would still be needed in 2021 to close projected shortfalls in aggregate demand and return global GDP growth to its pre-pandemic level. The level of required support could rise even further if repeated waves of the virus lead to additional economic headwinds, or if traditional recession fallouts such as unemployment or bankruptcies sustain.
Businesses may instinctively, and understandably, react to additional waves of the virus by focusing on immediate relief efforts. However, businesses should also keep the long game in sight, realizing the transformative power of Recovery Investment to drive longer-term, sustainable growth.