Global | Coronavirus Watch: Grounds for cautious optimism

A run of encouraging business surveys and the apparent successful reopening of the Israeli economy suggest that upside risks to our already above-consensus outlook may be rising.

However, responses in Europe’s March surveys probably preceded the announcements by some governments of new restrictions to contain the spread of Covid-19. So the surveys may not accurately reflect underlying conditions and sentiment.

Meanwhile, the sharp resurgence in global Covid-19 cases shows that there are still obstacles to be navigated on the path to normality and that clear downside risks to activity will persist in the near term.

Notably, Turkey has seen a sharp surge in cases despite a relatively successful and widespread vaccine rollout. This suggests most economies may need to ramp up inoculations substantially before they are able to reopen their economies fully, while containing Covid case numbers.

In India, after a lengthy period of easing restrictions and falling case numbers, Covid case numbers are rising again, casting doubt on hopes that the population may have achieved some form of natural herd immunity.