With continued lockdowns and disruptions to business operations due to COVID-19, and a vaccine not expected until mid-2021, firms are designing strategic plans amid the most uncertain year in recent memory. Our analyst teams expect the global economy to continue to recover, but the recovery will be slow and weak because of ongoing COVID-19 social distancing restrictions, business bankruptcies, heightened unemployment, and weak business confidence. However, do not expect all countries, industries, and consumer segments to show the same type of price sensitivity. Prepare for a K-shaped recovery in the 2021 global outlook by correctly segmenting your global portfolio to align internally on the right priority markets and customer segments to focus on in 2021, and then apply country-level scenarios to pressure-test the resilience of your strategic plans.
The global economy will gradually recover from the worst recession since WWII, but the pace is uncertain
Following the COVID-19 recession, every region is expected to rebound in 2021. However, these growth rates mask substantial variation in performance across countries, subnational regions, industries, and consumer groups. Tourism-based economies and primary commodity exporters will see the most sustained disruptions to domestic growth.
Prepare for a K-shaped recovery to continue in 2020 and across 2021
Even more than in past recessions, the impact and recovery trajectory from the COVID-19 shock will differ across industries, countries, and consumer classes. This disparity results in a K-shaped recovery, broken down into “winners” and “losers” in terms of recovery. Firms need to focus on understanding the winners and losers to assess customer demand and price sensitivity across markets over the coming years.
Conduct scenario analysis to anticipate changing assumptions
The trajectory of economies grappling with the coronavirus is still uncertain, so businesses should utilize scenarios as they develop their 2021 strategic plans. Applying scenario thinking across business units will improve market monitoring and adjustments as key assumptions about the operating environment change.
Download an executive summary of the 2021 Global Outlook today:
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