2021: What to expect from the economy?
We live in tumultuous times. Not only are we in the middle of a recession, but also in the middle of the first mass pandemic in a century and facing constant social and politic upheaval all over the world.
In situations like these, which the world hadn’t seen in decades and most people had never faced, the economy becomes chaos – and planning for the future, both in personal and general ways, gets very difficult. After all, we plan based on what we expect – but when we don’t know what to expect to begin with planning gets dicey.
The good news is, while this is unknown territory for many, it’s not the first time in world history we see this. In fact, the very latest pandemic (that is, the Spanish Flu) started right after a major war (that’s WWI) and was followed by even more unrest (the aftermath to WWI,) a huge recession (the great depression,) and yet another war (WWII.)
That’s to say, we’ve definitely seen much worse times. Most of the 20th century, in fact, were less stable in all levels than our current days, even when current times are the least stable we’ve seen in decades. And thanks to prior experience dealing with recessions, pandemics, and other problems, we can at least predict more or less how the economy should go this year.
Expect growth, but not too much
There are already several COVID vaccines being distributed all over the globe. This means that in a few months countries will be able to ease (but not lift) current restrictions.
Once restrictions to gatherings are at least partly lifted, places like malls or restaurants that have seen severely decreased attendance will get more customers, which should in turn help the economy recover.
This doesn’t mean things will be fine and perfect in the short term, however. You should also expect several sectors of the economy will slide further down, and layoffs will happen in many cases – although how many and how hard people are hit will depend greatly on how your local government decides to handle the fallout.
Brace yourself for a rollercoaster
Because that growth we just mentioned won’t happen at once, or steadily.
It’s important to understand that things will seem to get better, and then get worse, probably several times. Expectation is that at the end of the year we’ll see a much better panorama than we do right now, but that won’t come without its own set of drawbacks and trial-and-error policies to handle both the economy and the current pandemic.
The best way to brace yourself for this? Save up money if you can. Try to have some money set apart lest things go south either in your local area or your own personal economy. In the US, there’s a current rollout of stimulus checks, with another one expected in the short term depending on how the Senate elections go.
Don’t waste that stimulus money. If you need it to pay bills (rent, gas, electricity, internet, phone,) go for it. But if you don’t particularly need that money right now, you’ll be better off saving it than spending it. Waste not want not is a very good line to keep close to heart in uncertain times – so don’t do what many people have and make plans to buy new clothes or electronics once that money arrives (if it does.) Instead, keep it saved so you have a fund to fall back on.
Expect local economies to flourish in small ways
Where I live, I’ve seen the economy flourish thanks to the pandemic in unexpected ways. Delivery services have popped up all over, while many people have started offering services from home – so while you can’t quite go out to a restaurant without risk, you can have homemade pizza, sushi, burgers, desserts, and many more things delivered. Moreover, several of my neighbors have opened small shops in their own homes, allowing others to purchase groceries or other necessities without having to make the trip to a supermarket.
While this kind of economy might seem impossible in some places (NYC, for example) in smaller cities with closer, less anonymous communities this will happen, or keep on happening. We’re all facing several needs, not only economic, but also psychological, as spending all your time idle isn’t particularly healthy for our minds. Small enterprises can greatly help us remain focused on something while helping us with any economic difficulties, even if only a bit.
If you happen to live in an area where this is happening, consider supporting your neighbors with their new businesses – and why not, perhaps even consider starting something yourself. Be it delivery, homemade food and deserts, small shops to provide for the neighborhood, or even selling items or services online (Etsy is a great way to sell crafts) jumping into such a goal can be a great help in these times.
Be patient when things don’t go your way
Not much of an economic prediction, but very important in these uncertain times. We’re all dealing with greatly affected schedules, work, and in some cases even living and family arrangements. The wave of change we’ve been riding since last year will continue through 2021, although hopefully with lessened strength.
When things don’t go your way, allow yourself a break. More importantly, try to be there for those close to you who might be experiencing losses both economical and personal.
Historically speaking, interesting times such as these tend to bring either the best or the worst of us. Always aim for the former, and never for the latter.