The National Association for Business Economics (NABE) released a survey that predicts the economic recovery in the U.S. to hit 5.6% in 2021, a whole percentage point lower than the previous estimate. The deceleration is driven by fears of a vaccine-resistant COVID-19 variant.
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Economic Recovery Slows Down
As reported by Fox Business David Altig, president-elect of the NABE and the director of research at the Federal Reserve Bank of Atlanta, said: “NABE Outlook survey panelists have moderated their expectations about the prospects for economic growth in 2021 since May."
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According to the survey, just below 60% of respondents said threats to the economy are “skewed to the downside,” compared to just 15% in May. Conversely –and as the pessimism mounts– 16% said the risks are skewed to the upside, down from 56% in the same month.
The possibility of a Covid variant able to bypass the vaccine is certainly at the core of the negative survey results.
Almost 60% of economists in the study said that such a scenario is the biggest threat, whereas the slowing vaccine uptake was the main risk for 9% of respondents.
“Another 9% said they were worried about the possibility of a ‘large fiscal program’ as Democrats craft a massive $3.5 trillion spending bill, while 5% of respondents said the greatest downside risk is fiscal policy inaction or gridlock,” Fox Business reports.
COVID-19, Less Severe
Experts from different fronts have also reduced their economic recovery forecasts. On Tuesday, the OECD said the country’s GDP growth would be 6% this year, down nearly 1% from May when the organism expected the economy to grow by 6.9%.
“While the U.S. was making solid progress with vaccinations –76.5% of adults have received at least one shot, according to the Centers for Disease Control and Prevention –and infections began falling, cases rebounded over the summer.”
According to CDC data, the U.S. is averaging about 140,000 new COVID-19 cases per day with roughly 1,000 deaths. Despite breakthrough infections taking place among vaccinated people, they have become significantly less severe.
As reported by CNN, Pfizer Inc (NYSE:PFE) Chairman and CEO Albert Bourla was quoted as saying on media that the company would be ready to ask for approval of a vaccine for kids in “a matter of days, not weeks.”
“Currently, Covid-19 vaccines are only approved for children 12 and older, which has stirred concern among health experts as cases in children increase, school years begin and the more transmissible Delta variant spreads,” CNN reports.