A year ago, China was at the helm of the world’s economy, but because of a strong vaccination program and an additional March stimulus package, the United States is ready to shoulder the burden of getting the world’s economy back on track after the devastation of Covid-19. Though the lockdowns started similarly around the globe, the United States has set themselves apart from the rest of the world as the world exits the pandemic economy.
World economists expect that the United States will be in the driver’s seat to push the world economy from the brink as countries are starting to get a handle on the Covid-19 pandemic. According to the Wall Street Journal, the US economy is expected to grow by around 6.5% this year, the fastest since 1984. This growth could not come at a better time and will spur growth throughout the world.
Recent data suggests things are headed in the right direction. The Washington Post recently highlighted that “The Labor Department reported that the economy had gained 916,000 new jobs in March and that the unemployment rate fell to a post-recession low of 6 percent.” This comes after an entire year of the highest unemployment numbers in decades, so the data showing a gain in jobs is welcome news.
China had been on pace to be the leader, but their Covid-19 response was not quite as sharp as the United States. “China was leading the recovery last year and the U.S. is picking up the baton this year,” said Adam Posen, president of the Peterson Institute for International Economics. “It would be good if Europe picked up the baton in 2022-23.”
Reasons for Success
There are several reasons for the United States’ economic surge. The speed with which America has rolled out the Covid-19 vaccination is a huge part of the solution, and they have surpassed the efforts of Europe and Asia in vaccinations.
The Washington Post reported “As of the end of March, the United States had vaccinated more than twice as large a share of its population as had the European Union.”
The other huge economic positive is that “Congress in March approved the Biden administration’s $1.9 trillion American Rescue Plan. Together with a $900 billion bill in December, it will add almost 1.5 percent to the global economy’s growth rate this year,” according to the Organization for Economic Cooperation and Development, in the Washington Post. The big push from the United States will spur world economic growth in other parts of the world as well.
Finally, the Federal Reserve has some say in the matter of economic growth for the United States and beyond. As it keeps the zero interest rates, this helps the American economy and also the world economy.
Worldviews: What Does the Future Hold?
Unfortunately, the rest of the world is not faring so well but will hopefully get a positive jolt from the ripples from the United States. For many countries that rely on tourism, the fact that the vaccine is rolling out so slowly and new variants are in play will hurt their bottom line.
The Wall Street Journal reported that “Vietnam tourism has collapsed, but the stimulus of the US will add 1.4% to gross domestic product over the next two years.” Thailand is poised to gain 3-5% because of the help from the United States, as well.
Unfortunately, the struggles Europe is having in vaccinating their nation’s workers will have negative ramifications on their economy for months. And the countries that truly rely on tourism will probably not be vaccinating their people anytime soon.
And as the United States gets back on its feet, their needs are pressing the already beleaguered supply chain in other countries. With more interest in manufacturing and building the economy back up, the United States will likely be hampered by the slow response of other countries.
Behind a strong vaccination program and another stimulus package, the United States is poised to lead the world’s economic recovery from the global pandemic. Their strong performance will help those close to them, and hopefully the world can put the economic troubles behind them.
I like to spend my time giving back with organizations that focus on mentoring aspiring entrepreneurs. I have supported after school programs that focus on entrepreneurial and global initiatives in local primary schools. I recently extended my mentoring to include students at Case Western Reserve University.