Strong rebound in trade activity across G20 countries
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High-frequency alternative data indicate a strong rebound in economic activity even as infection rates rise and restrictive measures remain in place across many countries, as per a report by Moodys.
The vaccination rollout in G20 countries is advancing and the number of fatalities has declined in recent weeks.
Financial conditions remain supportive in the US and euro area but are tightening across some emerging markets.
The report said that infections rates are rising again, but vaccinations tame fatality rates New infections are spiking again across 13 of the G20 countries.
Nevertheless, the number of fatalities has decreased in recent weeks, as vaccinations gather pace.
The UK and the US lead in vaccinations among the G20 countries. Pent-up demand is driving a rebound in economic activity, even as restrictive measures remain in place across many countries.
US household spending has risen above pre-Covid levels across all income groups, driven by retail, apparel and general merchandise spending.
The latest high-frequency data suggest a strong rebound in trade activity across G20 countries. Industrial production and manufacturing data support a continued, although uneven supply-side recovery.
"Our proprietary indicators show that financial conditions remain supportive in the US and euro area, and they continue to improve in the UK. In contrast, the financial conditions recovery in emerging markets has stalled, with conditions tightening in China, Brazil, Turkey and Argentina," the Moody's report said.
G20 countries continue to battle the third wave of the virus, with the pace of growth in new infections spiking in more than 60 per cent of the countries, the report said.
In recent months, new Covid-19 strains led to higher fatality rates. But deaths have begun to decline except in Brazil, Russia and Mexico.
Vaccinations are advancing at varied speeds, with the UK and the US in the lead among G20 economies.
Half of the G20 emerging markets have now vaccinated more than 9 per cent of their population, with Turkey and Saudi Arabia recording the highest rates, it added.
