Explained: Will latest lockdowns, curbs derail GDP recovery worldwide?

Markets and economies are navigating a sequence of vaccine optimism and virus risks, with the mutant strain too now thrown in the equation. Let us take a look at where we stand in India and around the world, and how things stacked are.

The re-opening narrative has encountered a reality check over the past couple of weeks. A surge in the number of COVID-19 cases is a reminder that we are not out of the woods yet. Immediate virus risks means that more lockdowns are likely, especially into Easter for Europe and Latin America.

For Europe, the lockdowns represent a brake on the economic recovery. For emerging markets (EM) countries, India included, the big worry is that COVID-19 will exacerbate macroeconomic challenges such as fiscal pressures. The divergence in the pace of vaccination remains a differentiating factor for markets. The US and China are the main pillars of the world economy, and of these two, the US appears to be better poised on the track to growth.