Which economies are doing well

Aarup Christiansen has personally seen his travel business revenues plummet. While he appreciates the governmental financial aid packages, announced on 14 March which include covering some of the costs of worker salaries , the rules and outputs have yet to be fully defined and put in place, leading to more uncertainty and layoffs.

In fact, the country is already talking about loosening some of the restrictions by Easter based on the containment so far, according to a Bloomberg report. Singapore scores high in the index for its strong economy, low political risk, strong infrastructure and low corruption in the survey, pushing it to number 21 in the overall resilience ranking. The country also moved fast to contain the virus and has had one of the flattest curves in the pandemic.

As a small country, Singapore depends on the recovery of the rest of the world to have the most successful rebound, but residents generally believe in the strength of the future here.

Containing the virus has proven challenging in major metropolitan areas like New York , and unemployment has already jumped to historic levels , in large part due to the mandatory shutdowns of more than half of US states, which has particularly hit restaurant and retail workers and other businesses that rely on foot traffic.

But the US government has moved quickly to pass stimulus measures to stabilise the economy, and social distancing strategies enacted elsewhere in the country, which seem to be having an effect, should lessen the overall impact of the virus, allowing for a quicker economic recovery. The US is also critical to the world economy, representing a nearly a quarter of global GDP , and the recovery of the global economy is highly dependent on how the US fares.

We felt confident that the Rwandan government would handle the situation way better than in our home countries. Due to recent improvements in corporate governance, Rwanda has made some of the largest leaps in the index in recent years, jumping 35 spots to its current rank of 77th most resilient in the world and fourth highest in Africa. Most importantly, it looks particularly well positioned to bounce back from this type of crisis as the country successfully contained Ebola from its borders after an outbreak from neighbouring Democratic Republic of the Congo in With its mix of universal health care, medical supply-delivering drones and thermometer checks at its borders, Rwanda stands to be well-equipped to maintain stability throughout the crisis, especially when compared to other countries in the region.

This year, the U. The pandemic-induced economic inequality gap is widening. Economic optimism cools as fall nears, thanks to the delta variant. Also Included in. Share this Story. Latest Episodes From Our Shows. This was facilitated by the savings rate falling from 9. The composition of spending was interesting. September was the fifth consecutive month in which real consumer spending on durable goods declined, this time by 0.

In fact, in the last five months real spending on durables fell Yet here is the interesting part: in September, real spending on durables was still This huge demand for durable goods, even as it abates, is contributing to massive supply chain disruption and higher inflation. If spending on durables falls further, this can help to alleviate supply chain congestion and reduce inflationary pressure.

Moreover, as people spend less on durable goods, they are spending more on services, something that should continue provided the virus stays in abeyance. Finally, it makes sense to spend less on durables.

After all, how many big screen televisions, dishwashers, and treadmills can a family have in one home? That said, some of the decrease in spending on durables is due to troubles in the automotive industry, not due to lessening demand. Meanwhile, real spending on non-durable goods increased 0.

Real spending on services was up 0. However, despite strong growth in spending on services, real spending remains 1. In addition, the ECI was up 1. The gains varied by industry and by occupation. On a quarter-to-quarter basis, the ECI was up 1. There was a stunning 7. Nonetheless, the ECI was up a more modest 0.

By occupation, the quarterly ECI was up 1. Meanwhile, it was up 1. The acceleration in employment costs, especially wages, reflects the massive labor shortage that is vexing many businesses.

Still, the increases in wages have not kept pace with rising prices. In other words, real wages have declined in the past year on average. If wages continue to rise at a rapid pace, this could contribute to sustained higher inflation. However, if businesses invest sufficiently in labor-saving or labor-augmenting technologies, then worker productivity gains can offset higher wage costs, thereby nullifying the necessity of raising prices.

One measure of investor expectations of inflation is the breakeven rate. Here is how it is calculated. The US Treasury and other governments issues two types of bonds: ordinary bonds that promise that the principal will be fully repaid and Treasury Inflation Protected Securities TIPS; in the United States that promise that the principal will move in line with inflation.

Because investors are protected from inflation, the yield on TIPS is a real inflation-adjusted yield. Ordinary bonds provide a yield that, theoretically includes both the real return and investor expectations of inflation.

Thus, the difference between the yields on ordinary and TIPS bonds is the investor expectation of inflation, also known as the breakeven rate. In recent months, breakeven rates for five- and year bonds have been rising as investors became increasingly worried about the potential for longer-term inflation.

This likely reflected investor expectations that the current high inflation would turn out to be transitory. Indeed, the five-year breakeven rate has lately exceeded the year breakeven rate, indicating that investors expect higher inflation in the short term than in the long term. This is consistent with the story that current inflation will be transitory. For some time, I and other economists have argued that, if breakeven rates suddenly spike, then investors will have become worried and will have upwardly revised their expectations, possibly compelling central banks to tighten monetary policy faster than anticipated.

In the past two weeks, breakeven rates started to spike. That is, they increased sharply, suggesting that the market zeitgeist is shifting as business leaders increasingly bemoan the apparent persistence of inflation. The supply chain problems in the global economy increasingly appear difficult to undo and the continuing rise in oil prices is a source of distress.

Indeed, oil prices are now at the highest level since Policymakers should ensure that rising inflation rates do not lead to a de-anchoring of inflation expectations and resist using subsidies or price controls to reduce the burden of rising food prices, as these risk adding to high debt and creating further upward pressure on global agricultural prices.

A recovery in global trade after the recession last year offers an opportunity for emerging market and developing economies to bolster economic growth. Trade costs are on average one-half higher among emerging market and developing economies than advanced economies and lowering them could boost trade and stimulate investment and growth. With relief from the pandemic tantalizingly close in many places but far from reach in others, policy actions will be critical.

Securing equitable vaccine distribution will be essential to ending the pandemic. Far-reaching debt relief will be important to many low-income countries. Policymakers will need to nurture the economic recovery with fiscal and monetary measures while keeping a close eye on safeguarding financial stability.

Policies should take the long view, reinvigorating human capital, expanding access to digital connectivity, and investing in green infrastructure to bolster growth along a green, resilient, and inclusive path. It will take global coordination to end the pandemic through widespread vaccination and careful macroeconomic stewardship to avoid crises until we get there. Who We Are News. This page in: EN dropdown. Email Print.