JPMorgan expects the global economy to continue accelerating into the second half of 2021 despite the risks posed by the delta variant of the novel coronavirus, and with the ease of the pandemic’s “crosswinds” and service sector activity returning to normal. In the report, the bank cites the case of the UK, where casualties have fallen “significantly”, as a “good omen” for regions where the delta variable is still on the rise, but with some delay in relation to the British experience.
“We are by no means satisfied with Delta’s risk, with new cases continuing to emerge across much of the US and Asia, with the addition of lockdowns in Australia this week,” says JPMorgan. “However, as progress in vaccinations continues, any new tragedy associated with the epidemic should be a small obstacle to a robust recovery,” the report states.
“Most central banks seem to share our constructive view,” notes JPMorgan, noting that the delta variable spread “appears to have little impact on their plans for gradual normalization” in advanced economies. “Any obstacle to growth across the delta is transient,” he says, citing positions such as the Bank of England (BoE), which has suggested short-term risks from the boom, but still adopts a “hard-line” tone.
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