This text was originally published in the Appendix. “Spring Economic ReviewWhich was part of Jornal Económico on April 9, 2021.
The European Union’s economy is waiting. Waiting for a vaccine: so far, only 16 doses have been given for every 100 Europeans; Very little compared to 45 in the US or 52 in the UK. Vaccination is expected to accelerate in the second trimester of pregnancy; Pfizer alone will deliver 200 million doses.
Awaiting PRR. With Biden’s new stimulus package, the United States has already announced public spending packages at around 13% of GDP since the start of the crisis, while the eurozone, which has joined in individual country efforts and the Commission’s recovery package, has declared less than half.
The result is that the European economy has almost shrunk from the weakness of the US economy in 2020 and will grow by just over half in 2021. As if that were not enough, we are now awaiting the decision of the German Constitutional Court, which is making the assessment. Common debt to be issued by the European Commission in the context of the recovery plan. As well as waiting for the outcome of the so-called fourth wave, which in recent weeks has prompted several European governments, including the French, Belgian and Italian, to take strict containment measures.
Economies live poorly with waiting, because waiting creates uncertainty. Therefore, the spring release of the IMF’s World Economic Outlook, released on Tuesday, slows growth in the European Union, in contrast to the upward adjustments for the United States and Japan, compared to the January release. For Portugal, the International Monetary Fund expects 3.9% growth in 2021.
The current uncertainty requires us to be cautious with these expectations and the Portuguese economy in particular is subject to waiting. As the International Monetary Fund itself acknowledges in a special chapter devoted to medium-term perspectives, tourism is a risk factor, as it is particularly affected by the epidemic, the risk of infection from open borders and the link with other nearby sectors, such as restoration. And small businesses struggling with trawling Portugal is one of the countries in the world where tourism has caused the biggest losses to the economy.
The scale of the problem cannot leave us comfortable. In the accommodation and tourism sectors, by default more than one euro is covered in two loans. In early March, the report “Portugal, Balanço social 2020” was published, a report resulting from a partnership between Nova SBE and Fundação La Caixa, in which I had the pleasure of working with Mariana Esteves and Bruno B. Carvalho. In it, we explain how the sectors of catering, tourism accommodation and transportation, which are the most affected by the crisis, have more workers with temporary contracts, less education, and wages below the national average. As well as more migrant workers. Therefore, the crisis in these sectors particularly affects vulnerable groups of the population.
With a vaccine and waves of infections waiting in the European Union, it now appears unlikely that the summer of 2021 will save us. Tourism has been the lifeblood of the recent crisis. Now that the float is punctured, we’re in trouble.
