China and Germany: optimistic signals from two major economies

The economy is suffering the full brunt of the second wave of the Covid, confinement paralyzes many sectors.

And yet, all is not dark, we are beginning to perceive some positive signs.

Yes, this week, and it's been a while since it happened, we had four positive signals.

The first, obviously, is the promise of an effective vaccine, or even several, because within a week we will have the first results of phase 3 of the vaccine from Moderna, the competitor of Pfizer.

Economically, this is absolutely major: it gives a horizon.

Finally !

Many companies will be able to start reactivating investment plans that were completely frozen.

We can finally develop recovery scenarios based on an exit from the epidemic at the end of the first half of next year thanks to the vaccines which will soon be available.

The second positive element of the week is the agreement on the European recovery plan.

A plan, I would remind you, gigantic of 750 billion euros: this plan is the fuel that must accompany and fuel the recovery of European economies from next year.

Third positive signal?

It comes to us from the largest European economy, Germany.

The recovery was better than expected this summer.

The German economy recovered much faster from the first shock of the Covid than from the shock of the financial crisis of 2008, as revealed yesterday by the Council of Wise Persons of the German Economy.

It's encouraging.

Suddenly, despite the current second wave, the decline in the economy across the Rhine will be limited to 5.1% this year while we were still expecting a drop of 6.5% a few months ago.

The recession will therefore be less deep than we feared.

So much the better!

Finally, the fourth positive signal comes from the world's second largest economy, China, which confirms its solid recovery.

And that is important for us too.

It creates a locomotive effect.

Yes, even if it is a recovery largely driven by the internal market.

But of course, the world benefits.

Consider that China's real GDP jumped 11% in the third quarter, after rebounding 55% in the second, just out of containment.

China has made the choice of hyper-strict, draconian control of the smallest epidemic outbreak: remember how 9 million people were tested in Qingdao this fall in just 5 days because we had found a small outbreak of 20 people infected.

But this punchy strategy apparently works and above all makes it possible to limit the economic damage.

And to avoid having to fight against several successive waves.

The Covid crisis is not over.

But we start to see the light at the end of the tunnel ...