The Day at a Glance | April 21 2021

The Top

*The European Commission assures that it`s highly unlikely that the region`s consumers will return to pre-pandemic levels of spending.

*German court withdraws impediments for the ratification of the European Recovery Fund.

*The World Bank warns of possible greater inflation in Latin America, Africa and the Middle East due to a rise in prices of food.

*The Central Bank of Canada is expected to announce a decrease in stimulus today after recording a larger than expected economic recovery.

Economic environment

The European Commission showed little optimism regarding the region`s citizens willingness to allocate their savings on consumption, which could decrease the continent`s rate of the recovery. The Commission published a report that included surveys filled by consumers, in which it assured that European consumers will probably not return to pre-pandemic levels of spending, even after the end of mitigation measures carried out to control the virus`s spread. The Commission based this on the fact that the greater part of accumulated savings during the pandemic has been largely concentrated among high income individuals and households, whose propensity to consume is lower; while lower income households, savings are much lower and it`s likely that this will incentivize less spending. The recovery in consumption is one of the determining factors for economic recovery at a global level and is relevant to Europe`s economic outlook – considering that the slowly moving vaccine program and the delay in fiscal stimuli have hindered the recovery. It`s estimated that Europeans have saved up close to 600 billion euro`s in the last year, but surveys concerning consumer sentiment and studies on the distribution of savings reveal that not enough conditions or willingness exist for citizens to channel their savings towards spending once the pandemic passes.