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Chief economist update: The virus, the vaccine, the variant

"Just when you thought it was safe to go back in the water."
- Jaws

About this time last year, the world was alerted - but only mildly alarmed - at yet another SARS-like disease spreading in Wuhan, China (the first confirmed case reported on December 8).

The world considered the infections as a China-only epidemic and dismissed as not of any greater import than the flu or SARS (severe acute respiratory syndrome) in 2003 - that infected 17 countries, with a total of 8273 cases reported and 775 deaths - or at the very worst, the swine flu of 2009 - with 58 countries infected, a reported 1,632,258 cases and 19,633 confirmed deaths.

Not even after China put Wuhan - a city of 11 million residents - in lockdown with residents confined to their houses and transport in and out of the city shut on January 23 last year.

So much so, that the International Monetary Fund's (IMF) first World Economic Outlook (WEO) report (released on 20 January 2020) predicted that, "Global growth is projected to rise from an estimated 2.9% in 2019 to 3.3% in 2020 and 3.4% for 2021."

What's more telling are what the IMF foresaw as risks to its outlook for 2020: "The balance of risks to the global outlook remains on the downside, but less skewed toward adverse outcomes than in the October WEO. The early signs of stabilisation discussed above could persist, leading to favorable dynamics between still-resilient consumer spending and improved business spending.

"Additional support could come from fading idiosyncratic drags in key emerging markets coupled with the effects of monetary easing and improved sentiment following the "Phase One" US-China trade deal, with the associated partial rollback of previously implemented tariffs and a truce on new tariffs. A confluence of these factors could lead to a stronger recovery than currently projected."

What a difference a few months make.

The World Health Organisation (WHO) named the virus COVID-19 on February 11 last year and declared it a pandemic exactly a month after on 11 March 2020.

No need to narrate and describe what happened thereafter. You, I and Irene and our neighbours went through what happened next - social isolation, lockdowns, panic buying (of toilet papers, mostly) - and the fear of losing our lives, livelihood and should we survive the pandemic, our retirement incomes as the global freeze wreaked havoc on our investment portfolios.

Fiscal and monetary authorities prompt and aggressive counter-cycle responses saw us through the year - mitigating impact on businesses and employment - that, at the same time, underwrote gains (or limited the losses in most equity markets.

Punctuated by the roll-out of vaccines towards the dying days of 2020.

All looked swell ... until the coronavirus variant that was first spotted in the UK and in South Africa.

It's reportedly less deadly but more infectious and has already triggered renewed lockdowns in Europe and Asia and the new strain has now circled back to China, that in turn, puts a question mark on whether or not a new vaccine would need to be developed against the new strain.

But if we learned anything from 2020, it is that fiscal and monetary authorities would do whatever it takes to preserve our lives, livelihood and finances.

And this time, without that divisive spoiled brat at the White House.

Read our full COVID-19 news coverage and analysis here.

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