The US economy will accelerate almost twice as fast this year as President Biden’s $ 1.9 trillion stimulus plan, combined with a rapid implementation of the vaccine, unleashes a powerful recovery from the pandemic, said the Organization for Economic Cooperation and Development on Tuesday.
But countries that are stumbling over the pace of their vaccination campaigns, especially those in Europe, are at risk of falling behind in the global recovery, as failure to stem the spread of the virus forces governments to keep areas of their economies closed, delaying the chance of people returning to normal life, the organization said.
In its forecast for the semester, the organization said the United States would grow 6.5 percent this year, a sharp increase from its 3.2 percent forecast in December. The increase in the world’s largest economy will generate enough momentum to help raise global production by 5.6%, compared to a 3.4% contraction in 2020.
China, which contained the virus before other countries, remains a major global winner, with a forecast of 7.8% growth.
While a global recovery is in sight, spending by governments with the intention of boosting their economies will have limited impact, unless authorities accelerate the national launch of vaccines and relax virus containment measures, the report added. If vaccination programs are not fast enough to reduce infection rates, or if new variants become more widespread and require changes in vaccines, consumer spending and business confidence will be affected.
“The stimulus without vaccines will not be as effective because consumers will not go out doing normal things,” said Laurence Boone, the OECD’s chief economist, at an online press conference. “It is the combination of health and fiscal policy that matters.”
This is especially the case in Europe, Germany and France in particular, where a mix of poor public health management and slow vaccination programs is weighing on the recovery, despite billions in government support. These expenditures “will not be fully effective until the economy is reopened,” said Boone.
The euro area economy is expected to grow 3.9 percent this year, slightly more than forecast in December, but slower than the United States. In Britain, which accelerated the implementation of national vaccination at the end of last year, the economy is expected to grow 5.1 percent, up from 4.2 percent forecast.
India’s economy is expected to grow 12.6 percent after a 7.4 percent drop in 2020, the organization added.
Stocks around the world rose on Tuesday, with bond yields falling from their recent highs. Technology stocks looked set to regain their position, with Nasdaq futures up 2.3 percent.
The S&P 500 is expected to gain nearly 1 percent when trading starts on Tuesday, the futures indicated. The Stoxx Europe 600 index rose 0.9 percent, led by utilities and technology stocks. Yield on 10-year US Treasury notes fell 6 basis points, or 0.06 percentage points, to 1.53 percent.
Technology stocks have withstood the impact of stock market volatility in recent weeks, amid rising bond yields and fears of inflation. There has been some concern that stronger economic growth will lead to inflation and that central banks will react by tightening monetary policy. On Monday, the Nasdaq fell 2.4 percent, ending the day more than 10 percent below its peak in January. Such a big drop is known as a correction. The S&P 500 fell 0.5 percent on Monday.
Those concerns seemed to have been put aside on Tuesday, as the Organization for Economic Cooperation and Development said it expected the American economy to grow 6.5 percent this year because of the $ 1.9 stimulus package. trillion from the Biden government and the increasing availability of the coronavirus vaccine. This is more than double the pace of growth that the organization predicted in December.
In other optimistic economic news, there was an unexpected increase in German exports in January. Citigroup analysts said they expected the pandemic and supply chain disruptions to cause exports to fall alongside imports. Instead, this data is a “big bullish risk” for GDP projections for the first three months of the year, analysts said.
It remains to be seen whether more market participants will believe the message from central bankers that the risks of high and sustained inflation are low. On Monday, Janet L. Yellen, secretary of the Treasury and former president of the Federal Reserve, also said he did not believe the stimulus package would lead to an increase in inflation. “I really don’t think this will happen,” said Yellen on MSNBC, adding that he expects the economy to return to full employment next year. She added, however, that tools were available if spending proved to be inflationary.
On Wednesday, US inflation data for February will be published. Economists polled by Bloomberg predict that the annual inflation rate will rise from 1.4% to 1.7%.
The basic experience of sitting in a single row of cars, talking on a sometimes truncated intercom and pulling out the window to pay for food before leaving is about to be proven to be changed for the first time in decades, Julie Creswell reports to The New York Times.
“Drive-through is one of those places that hasn’t changed in decades,” said Ellie Doty, American marketing director for Burger King. “But with Covid, we are seeing a dramatic acceleration from the directions we were already taking.”
Applebee’s is testing its first drive-through in Texarkana, Texas. Shake Shack is experimenting with a number of new designs and plans, including panoramic windows and pickup along the curb.
More restaurants are trying to encourage customers to use ordering apps, which improve ordering accuracy. They are also trying to figure out how to increase the speed of consumers during the drive-through or collection process.
Some restaurants, like McDonald’s and Burger King, are adding several lanes for vehicles. Burger King is conducting three-lane tests in the United States, Brazil and Spain. In the United States and Spain, the third way is “express” for pre-orders made by the app. In Brazil, the route takes delivery drivers to a collection area with cabinets or food shelves.
Burger King is also looking to propel its drive-throughs into the future with an artificial intelligence system similar to Big Brother, the Deep Flame.
At the moment, almost half of Burger King’s drive-throughs with digital menu boards are using Deep Flame technology to suggest foods that are particularly popular in the area that day. It also uses external factors, such as the weather, to highlight items such as iced coffee on a hot day.
Burger King is testing Bluetooth technology that will be able to identify customers on Burger King’s loyalty program and show their previous orders. If a customer ordered a small Sprite and a Whopper with cheese, hold the pickles, in the last three visits, Deep Flame will calculate that there is a high chance that the customer will want the same order again.
Much attention is being paid to carbon capture as a way to meet the goals of the 2016 Paris climate agreement. The idea seems deceptively simple: divert pollutants before they can escape into the air and bury them well in the ground, where they cannot cause damage.
But the technology proved to be extremely expensive and did not catch on as quickly as some supporters expected, reports Stanley Reed for The New York Times.
The oil giant BP is leading a project in England to collect emissions from a pipeline of chemical factories in northeastern England and send it to a reservoir deep in the North Sea. BP hopes to achieve sufficient scale to make a business profitable.
BP and its partners propose to build a large electric power station powered by natural gas near a closed steel plant at the mouth of the river. The plant would help to replace Britain’s old fossil fuel plants and provide essential reserve electricity when the country’s growing fleet of offshore wind farms has come to a standstill. The equipment would remove carbon dioxide from the plant’s exhaust.
Pipes would pass through the area collecting more carbon dioxide from a fertilizer plant and a hydrogen plant, which is gaining popularity as a low-carbon fuel. BP also hopes to connect other factories in the area. Pipes would carry carbon dioxide 90 miles under the North Sea, where it would be pumped below the seabed in porous rocks.
Four other oil giants – Royal Dutch Shell, Equinor of Norway, Total of France and Eni of Italy – are also investors in the plan, although the final green light awaits a financial commitment from the British government. The price of the initial stage could approach $ 5 billion.