The Road to Recovery

As we move forward into a post-pandemic normal (whatever that may look like), long-term investors like ourselves are focused on how and when economies and businesses will recover. In general, we believe the sharper the decline, the sharper the recovery. I think there are certain countries where we'll see a lot more economic growth as lockdowns ease. In countries that had sharp GDP declines last year, like Mexico and Brazil, I would expect strong rebounds. On the other end of the spectrum, we saw economies like China’s actually grow in 2020. So, while China is likely to see additional growth, I wouldn’t expect as dramatic of a rebound there.

GDP Growth Forecast (%)

Next year’s consensus estimates are projecting 5.5% global growth. In 2020, we had a 3.5% percent decline in global GDP, which is fascinating because it sounds like a small number, but the market and earnings declines felt fast and dramatic as they were happening. It's really going to come down to productivity growth—how productive we are, how many people are in the labor force—and those are pretty slow-moving numbers. I expect three or four years down the road, we'll fall back in line with normal global growth trend levels.