28 Aug How Economy will Bounce Back in 2021
COVID19 and lockdowns resulted in a roller coaster for the economy, but things are finally stabilizing and looking positive. The economy is steadily rising due to the revival of the market demand after the pandemic.
Here are three ways in which this is happening:
1. High real-estate demand:
Due to the pandemic, the supply of houses significantly reduced as people rushed out of populated cities and looked for better house offices. This shortage in the supply urged the construction of new properties as the demand is still high.
The reduction in the overall prices and the mortgage has resulted in this surge as people want to take advantage of this decrease before the prices spike again.
Many are betting all their funds and savings for a good residence which has led to an increase in house sales by 17% as compared to that of the previous year.
As real estate plays a major role in determining the economy, this can be seen as a positive sign that the economy is on the rise.
2. Vaccination and decreased lockdowns:
Lockdowns are one of the major reasons why the economy suffered such a huge blow, but it was also something that could not be avoided due to the fear of the infection spreading.
The vaccination, however, has changed this view, and the fear and necessity of lockdowns are decreasing. People and businesses are slowly and gradually returning to their usual selves, and business is booming.
The restriction on trade and shipments is also decreasing, which means the imports and exports are returning to normal.
Since most businesses have also gotten used to remote work, they are taking full advantage of the situation to implement hybrid business models that can give them the best of both worlds.
As all other areas of life return to normal, the economy is also making a comeback, this time equipped with the knowledge of dealing with pandemics and lockdowns.
3. Increase in the prices of metals, oil, and interest rates:
Due to the forecasted increase in both consumer and industrial goods, the price of metals, such as copper and oil, is on the rise. Since restricted shipments are back on track, the oil demand has also increased.
And because petroleum is a core ingredient in so many products, especially plastics, this has also led to the rise in its demand.
Another cause for the spike in oil price is the expectation of greater usage in the future, which has led to its storage for future use.
Interest rates often reflect the status of an economy. This is because interest rates rise with the economy or when a rise in the economy is being expected.
As interest rates are on the rise again, it can be said that the economy will soon follow.
In essence, the understanding of the global situation and ways to cope with it is increasing, resulting in the stabilization of our economy.