TranHoaiDuc.com: It is good now to think about what will the world look like in 2021 and we will get the connection to Vietnam economy and guess how it will changes. TranHoaiDuc.com would like to introduce the very interesting article of the famous American jounalist RICH KARLGAARD. Sourced from forbesvietnam.com and translated by TranHoaiDuc.com.
Try to ignore the panic for Covid-19 and imagine the time for another year, the spring of 2021. What will the world be like?
WHEN THIS ARTICLE HAS MADE, new cases of Covid-19 and economic crisis have erupted around the world. Italy is blocked, followed by other countries in Europe and elsewhere on the globe. US stock markets are down more than 20% from their peak in February. Large and small public events in sports, arts and business are canceled. At one point, oil price dropped below 20 USD / barrel while natural gas price dropped below 0.07 USD / m³. Where will all this lead? It is difficult to make short-term predictions, due to the emergence of an entirely new element in the economic sphere - Covid-19. How is the disease spread? What is the mortality rate between different population groups? What policies are best to slow the spread of Covid-19 (and varies by country)? Can warmer weather in the northern hemisphere slow down the rate of infection? Will the pandemic spread to South America and Africa this fall? When will the vaccine be available? All answers are conjectures. So, try to ignore the panic for Covid-19. Imagine another year, the spring of 2021. What will the world be like? Here are the predictions:
GLOBAL GROWTH will be 4%, pent-up demand and a new vaccine will help global GDP growth recover from 1.2% in 2020. China will have solid growth of 6%, up from 2.8% in 2020. China will also benefit from cheap oil reserves in 2020.
However, not everything is favorable for China. Covid-19 will accelerate the rebalancing process, making the global supply chain no longer too dependent on China but leaning towards Brazil, India, Mexico and Southeast Asia. This will limit China's growth potential in the coming years.
The United States will recover from zero growth in 2020 to 3% in 2021, but that will be a long-standing and long-forgotten problem: inflation.
GLOBAL TRAVEL WILL RECOVERY PERFECT. Those who foresee that Covid-19 will open up a new way of life formed around video conferencing, virtual entertainment and increasing demand for e-commerce - once experts predicted it was called Nesting. 3.0 - seems to have forgotten an important lesson. That is: human nature has not changed. People like to travel and gather. Very soon they will want to stand up and walk.
START-UP TRAINS will become an endangered species. Around the world, mostly in the United States and China, there are more than 500 unicorn startups funded by venture capital. These companies were valued at more than $ 2,000 billion in total. But here comes an ugly secret: The vast majority of unicorns burn more, a lot more, than they make. While the stock market is on the rise, private investors do not care about the rationality of that. After all, what they bet is the potential of unicorns, not their profits. But in the stock market is declining, investor expectations quickly narrowed. So is the number of unicorn companies.
INFLATION WILL RETURN BECAUSE Donald Trump, out of fear of not being re-elected, dismisses the head of the Federal Reserve in the summer of 2020. The head of the Federal Reserve is the one who enthusiastically supports Modern monetary theory. With almost unlimited cash printing and the promise of trillions of dollars in new infrastructure after his election, Trump managed to be re-elected. The economy in 2021 had a monetary push. But that comes with inflation returning from the previous two decades. And that became the business story of 2021.
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