For Investors: McKinsey And Company's Outlook -- July 11, 2021

Something to keep you occupied between now and tomorrow morning. From McKinsey & Company from earlier last week. It supports my view that in the big scheme of things, for investors, Covid-19 was not the Black Swan many made it out to be.

Turning the corner. Are we heading for a 50 percent economic expansion? Had anyone suggested in early 2020 that there could be a boom decade in the offing, many people would have fainted at their (WFH) desks. But history suggests that we could see that kind of expansion after a recession, with the right moves from public- and private-sector leaders 

Two tracks. In March 2020, we argued that the imperatives of our time were the battles to flatten the twin curves of viral spread and economic shock. We said then that there was no trade-off between the virus and the economy, and that has been borne out: no country kept its economy moving well without also taking control over the virus.

Uncertainty is receding. Today, after multiple peaks of viral spread and with the COVID-19-vaccine rollout progressing, some regions are finally getting a handle on both the disease and the economy. Although leaders have applied public-health measures and economic stimulus with varying intensity, government support through fiscal and monetary policies has unequivocally worked. Employment rates are recovering, though at different degrees, in all countries. Even nations that are still facing challenges are likely to see strong headline GDP growth in 2021. It’s now possible to imagine a recovery that will mean a better quality of life for more people—and a more sustainable future for the planet.

The big question. What should public- and private-sector leaders focus on next? Three broad beliefs shape our answers. First, 3 to 4 percent annual global economic growth is achievable with available technology—a “productivity miracle” isn’t needed. Second, we don’t have to choose between sustained and inclusive growth; the goals can be complementary. Third, the medical advances and process accelerations achieved in response to the pandemic open the possibility that we can make rapid and unprecedented progress against persistent health problems.

Prosperity for all. If global leaders set the expectations that these outcomes are possible, and act on them, then the world could be on the cusp of a new age of growth in jobs and income. The road will be rough in places. The first year of the pandemic and the policies designed in response have had a profound impact on how people view their governments, how well economies are positioned to rebound, and how much public and private debt has been accumulated along the way.

It’s an extraordinary opportunity—and a commensurate challenge. If the world’s public- and private-sector leaders aren’t able to capitalize on the promise of prosperity for all, the recovery could end up adding only 10 to 20 percent to GDP, less equitably distributed, less sustainable, and with worse outcomes for global health and the environment.