BUSINESS:
Will History Repeat Itself?
What will the economic and business environment be when we emerge from this current lock-down?
I am a great believer in history repeating itself. So, what did we experience when we emerged following our initial Covid-19 lock-down during the first half of 2020?
How did we fare in respect of key economic indicators? • GDP, the measure of economic growth (or contraction), grew from an annual average growth rate of negative 1.3% for the June 2020 year ended, to 5.1% for the June 2021 year ended • Getting behind the quarterly GDP numbers tells the real story. In the ¼ of the initial lock-down (1/4 ended June 2020) GDP contracted a whopping 11.0%. Growth in the following quarter was even more spectacular – GDP grew by 13.9% in the ¼ ended September
2020, buoyed by a rebound in business
activity and consumer spending. In the next ¼ GDP contracted 1% followed by two ¼’s of more usual growth – 1.6% and 2.8% respectively •
The unemployment rate dropped from 4.1% at June 2020 to 4.0% at June 2021 – a further positive sign for the economy
•
On a more sobering note; the annual inflation rate increased from 1.5% to 3.3% and the Current Account Deficit from $4.7bn to $11.2bn (largely due to a marked decline in travel-related revenue).
The strong economic and business performance in the year following the initial lock-down was greatly aided by the buoyant economy going into
16 l Covisor y Conn ec t Ma gazin e
