Divergences by economy and by sector, for now

Recent data confirm that global economic activity has continued to recover from the height of coronavirus restrictions in Q2. But while activity in China is now above its pre-virus level, there is still a major shortfall in other economies, including Spain and the UK. (See Chart 1.) What’s more, timely indicators suggest that recoveries across much of Europe have stalled in recent weeks as restrictions have been re-imposed. By sector, industry and trade have continued to make up lost ground, but retail and consumer services are suffering. The good news is that those economies and sectors now feeling the greatest strain should also experience steep catch-up recoveries next year as vaccines are rolled out.