Q3 Market Commentary – October 2021

Returns in emerging markets have also been hampered by the “Great Vaccination Divide”, to borrow a phrase from the IMF. While great strides have been made in the global vaccination rollout, low-income nations are still lagging behind their richer counterparts. These countries also lack the resources to provide economic support in the form of stimulus packages. Because of this, while the IMF predicts that economic output in developed economies will return to pre-pandemic levels by 2022, most emerging economies will take many more years to recover.

While developed economies have obviously benefited economically from better access to vaccines, allowing lockdowns to end and economies to re-open faster, understandably the threat of a potential resurgence of COVID-19 remains. This is of course a possibility but, so far, the vaccines look to be effective at preventing serious infections. The real test will be how well the vaccines work over the winter in the northern hemisphere.

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