The concept of a soft landing in the global economy has recently gained steam. This term refers to an economic slowdown without the typical effects of a recession. Recent reports and data suggest that a soft landing is becoming more likely in the near future.
As most people know, the economic recovery of 2020 was unusual in many ways. The coronavirus pandemic created an unprecedented shift in consumer behavior, which resulted in a massive hit to the global economy. While the initial impact was severe, the economic crash started to slow much earlier than expected. As governments around the world implemented various stimulus programs, the recovery began to gain momentum.
Now, economists and market watchers are hopeful that a soft landing could become a reality. This is a desirable scenario, as it would indicate that the global economy is on a path to stabilization. Recent data suggests that there is cause for optimism.
The International Monetary Fund (IMF) recently reported that economic growth is projected to reach 5 percent for 2021. This is an increase over the growth rate of 3.5 percent from 2020. The IMF report also states that the global economy could reach pre-pandemic levels of output by the end of this year. This is an encouraging sign that a soft landing is starting to look much more likely.
Other positive indicators include job growth numbers, which have been steadily increasing each month. This is an encouraging sign that businesses are hiring and that consumer confidence is increasing. The stock market has also been performing well as of late, with the Dow Jones reaching 30,000 points for the first time ever.
Clearly, there are many factors to consider when assessing the potential of a soft landing. The hopeful signs listed above are certainly a good sign that the global economy is in a better place than it was last year. All signs indicate that a soft landing is starting to look much more likely.