No predictions, but once in a while it is useful to imagine the news getting better. Look beyond the summer and two potentially game-changing events come into view. Scientists tell us a vaccine and/or treatment for Covid-19 could map a pathway out of the pandemic. As to the second possibility, my friends in the foreign policy community have taken a vow of silence. Whisper it ever so quietly, but the US may choose a new president.
Much of the world is now coming out of coronavirus lockdowns, but the recovery will remain patchy and hesitant until we have much greater certainty that Covid-19 can be permanently suppressed. The present danger is that anything resembling a return to normal life will herald a second wave of infections in the autumn. Epidemiologists think some resurgence is inevitable. The question is one of scale. As long as there is uncertainty, business will hold back from the full-throated investment needed for a strong recovery.
The critical ingredient for a sustained upturn is confidence. By removing future risk, a vaccine — or the firm promise of one within, say, a year — would transform the outlook. A treatment that greatly reduced mortality rates would go a long way in the same direction. The grim picture painted at present by most economic forecasters rests on an assumption that the virus will hang around indefinitely. With the prospect of complete suppression, the economic bounceback would probably be much stronger than that seen in the aftermath of the 2008 financial crisis.