Highlights

  • Growth is expected to accelerate sharply during the year thanks to the end of containment measures and mass vaccination. As households unlock the large amount of savings accumulated, consumer service sectors are expected to benefit.
  • In 2021, Central Banks’ strategies are not expected to deviate from current course, implying a mix of stable short rates, QE, and maintaining long rates at levels that are economically unattractive for investors.
  • Expansionary fiscal policies will continue in 2021, supporting sectors that are still in difficulty. Rebalancing public finances is not on the agenda even in the context of a strong recovery.
  • All inflation indicators have turned red. We expect inflation to be more pronounced than currently anticipated by the financial markets.
Written in April 2021.

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