Wall Street Journal

After the worst year for the global economy since the Great Depression, the U.S. is set to lead a vigorous rebound in the West as mass vaccination against Covid-19 propels a return to more or less normal life.

The revival will come in stages, with the U.S. and countries such as the U.K. recovering faster than those in the European Union, as the timing and speed of recoveries will depend largely on the pace and reach of vaccination, economists say.

Economies in North America and Europe are expected to fire up as shops, restaurants and hotels throng with newly inoculated consumers armed with savings they amassed during the long pandemic. Moody’s Analytics estimates households world-wide had $5.4 trillion in pandemic-related savings at the end of the first quarter.

Countries such as the U.S. and the U.K. are expected to enjoy quicker consumer-led recoveries as their governments close in on vaccination goals. Data Thursday are expected to show the U.S. growth accelerated in the first quarter as coronavirus-related restrictions eased and vaccination coverage increased.

In Europe, where vaccination drives have been beset with supply hiccups and worries over side effects, economies are likely to take longer to shake off their lockdown-induced torpor. Data Friday are expected to show the 19-nation eurozone shrank in the first quarter as chunks of the currency area reimposed public-health restrictions to tame new waves of infection, though more up-to-date business surveys suggest growth was already coming back in April.

The 27-member European Union has given at least one shot of vaccine to only 21% of its citizens, according to figures compiled by the University of Oxford’s Our World in Data project. Vaccination rates are now accelerating, however, thanks to widening access and extra supply. That is paving the way for a stronger rebound in the second half of the year. The International Monetary Fund expects growth of 4.4% in the euro area this year, led by recoveries in France and Germany.