Research Briefing | May 12, 2021

Global | Is this a goldilocks recovery? Consumers will decide

Ipad Frame_Is-this-a-goldilocks-recovery-Consumers-will-decide

Despite Covid cases rising globally, upside risks to our already relatively optimistic baseline are material. The main risk stems from the estimated $4.7trn pile of excess savings accumulated by consumers in advanced economies that could be tapped to unleash a wave of post pandemic spending.

What you will learn from this report:

  • Our baseline estimates advanced economy consumers will spend on average 5% of these savings. But if they splash out even a little more, the 2022 growth outlook will rise considerably.
  • Whether consumers view their excess savings as wealth or as income is key to determining the size of the boost to the economy.
  • For emerging markets, there is also upside but it is more limited. Although faster global growth is helpful for emerging markets, the associated tightening of financial conditions is a significant offset.
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