As the vaccines roll out, how will the global economy respond?

As the vaccines roll out, how will the global economy respond?


Recent numbers from global credit insurance company Allianz Trade estimate global economic growth of +4.6% in 2021, followed by a sustained recovery in 2022 at +3.8%, as a result of the vaccine rollout.

“As it stands, it looks like it will get worse before it gets better," says Kirsten Neergaard, Nordic Director of Risk, Information, Claims & Collection at Allianz Trade.

“After a resurgence in the economy in the summer and autumn of 2020, another wave of the pandemic hit, and new lockdowns followed in its wake. We’re experiencing a small recession at the moment but there’s a possibility of an incipient recovery if the vaccines roll out as planned," she adds.

Vaccine economics is about confidence

Despite hurdles, especially on the supply side, Allianz Trade expects the vaccination of vulnerable sections of the population in most countries to still remain achievable by the end of summer 2021 setting the stage for economic growth in H2 2021.

Vaccine economics is about confidence. The rollout of vaccines should provide the confidence to restart the service economy, the confidence for people to begin consuming precautionary savings, and the confidence for businesses to resume corporate investments.

“Vaccine economics is all about confidence and that’s why we expect a technical economic recovery in H2 2021. However, certain sectors will only see recovery in 2022”, says Kirsten Neergaard.

The aviation and tourism sectors in particular will only hit pre-crisis levels some time during 2023. And that expectation hinges on the promise of stability offered by the vaccines.

“The vaccine rollout is extremely important to the hardest-hit sectors. Covid-19 is here to stay. However, the vaccines will offer stability, giving these sectors a chance to recover”, explains Kirsten Neergaard.

Policymakers under pressure and scrutiny

Thanks to safety measures and policies put in place by governments, the level of bankruptcies were lower in H2 2020. However, Allianz Trade expects we’ll see a delayed wave of bankruptcies when the safety measures are rolled back.

“We expect the debt levels of some companies to have increased and when the safety net is removed, a delayed wave of bankruptcies is expected,” says Kirsten Neergaard.

Policymakers will be under pressure and under scrutiny, and knowing how and when to pull the plug will be essential.

“The global economy is not out of the woods yet and we expect policymakers to offer the support needed for businesses to keep the lights on until the economic recovery kicks in”, she adds.

The Nordics will see an increase in insolvencies

Despite vaccines beginning to be distributed globally, these are still uncertain times. In the end, risks related to sequencing and transitions (stop-and-go on the lockdown, politicisation of vaccination campaigns, and policy support) prevail.

“The Nordic countries have a strong and healthy economy but due to the economic safety measures put in place to help businesses, we expect an increase in bankruptcies when these are removed. Furthermore, businesses in the Nordics can easily be affected by lockdowns in for instance Spain or the United Kingdom”, says Kirsten Neergaard.


Sweden 7%
Norway 18%
Denmark 27%
Finland 15%
Moving forward into 2021 and 2022, it’s more important than ever to have good credit management and a strong cash flow.

“But even more important is having the right strategy and a good knowledge of your partners, your suppliers, and your clients. It’s important to get ahead of the situation”, says Kirsten Neergaard.