Passport Recuperacion Global Q4 2020 01.2021

GLOBAL RECOVERY TRACKER: Q4 2020
December 2020
INTRODUCTION
EUROMONITOR RECOVERY INDEX
OVERVIEW OF MAJOR ECONOMIES
COUNTRY INSIGHTS
CONCLUSION
APPENDIX: INDEX METHODOLOGY
INTRODUCTION
Scope
▪ Euromonitor International’s Global Recovery Tracker – a quarterly report Disclaimer

series – and Recovery Index keep track of the latest quarterly economic data Much of the information in this
briefing is of a statistical nature and,
and forecasts in key economies, to gauge when activity is likely to return to the while every attempt has been made
pre-pandemic levels of 2019. It helps consumer-focused businesses uncover to ensure accuracy and reliability,
Euromonitor International cannot be
and understand developments and trends behind the data, giving them a held responsible for omissions or
powerful tool for strategic planning. errors.
Figures in tables and analyses are
▪ Data quoted in this report are seasonally adjusted and are at constant 2019 calculated from unrounded data and
may not sum. Analyses found in the
prices, using fixed 2019 exchange rates between the US dollar and each local briefings may not totally reflect the
currency. companies’ opinions, reader
discretion is advised.
▪ Forecast and scenario closing date: 16 November 2020.
The coronavirus (COVID-19)
▪ Report closing date: 15 December 2020 – the date the report writing stopped. pandemic has triggered the most
severe global recession since
World War II. In Q4 2020, the end
Economic activity of the pandemic started as
countries began administering
effective vaccines among the
population; however, vaccine
Employment distribution and scepticism risks
Global remain. In this context,
Euromonitor International has
Recovery Consumer spending developed the Global Recovery
Tracker to help businesses track
Tracker and predict when activity in key
Retail sales markets will recover, so as to plan
their strategies accordingly.
Consumer confidence
© Euromonitor International GLOBAL RECOVERY TRACKER: Q4 2020 PASSPORT 3

INTRODUCTION
Key findings
The spread of COVID- The end of 2020 is seeing the emergence of regional second waves, especially in
19 continues to Europe and North America. The Eurozone and UK economies have had to resort to
accelerate in Q4 2020 new lockdown measures to control fast-rising infection rates. The baseline forecast
assumes these second waves are contained in Q4 2020, and widespread vaccine
deployment occurs around mid-2021.
Russia, the UK and the Already, before mid-December 2020, Russia, the UK and the US will have started
US are the first distributing vaccines. The EU is likely to follow soon. The vaccines will initially be
countries to start administered to medical staff and the most-at-risk population groups. The start of
distributing vaccines vaccine distribution is the start of the end of the pandemic, which is already in sight;
however, major logistical hurdles to global vaccine distribution remain.
The US and German Economic recovery is likely to be swift once the social distancing effects fade.
economies are Therefore, we expect economies to start fully recovering as widespread vaccine
expected to recover by distribution (which is assumed to be implemented around mid-2021) creates herd
the end of 2021 immunity. As the probability of widespread vaccine distribution in 2021 rises, so the
economic outlook will improve.
Consumers continue to Social distancing and lockdowns continue to negatively impact the retail sector, as
cut back on spending individuals cut back on their in-store shopping. On top of this, uncertainty about the
path of the pandemic continues to make individuals wary about spending on big
ticket items, and raises precautionary savings. From high-frequency indicators, we
see that these effects increase with the current rise in infections; however, not to
the same magnitude as during the first wave of the pandemic.

INTRODUCTION
Key events so far (1)
• 8 December 2019 First patient reports symptoms similar to a coronavirus infection in Wuhan, China.
• 7 January 2020 The disease is identified by Chinese authorities as a new type of coronavirus – novel
coronavirus or nCoV.
• 30 January The WHO declares “Public Health Emergency of International Concern”.
• 14 February The first COVID-19 death in Europe is announced (in France).

• 23 February Italy starts lockdown as it sees the first major outbreak in Europe.
• 28 February Stock markets worldwide report the largest single-week declines since the 2008-2009
global financial crisis. Oil futures see the largest single-week decline since 2009.
• 11 March The WHO declares the outbreak of novel coronavirus to be a pandemic. Global stock
markets fall further.
• 16 March The week the world shuts down with half of the global population placed into some form
of quarantine.
• 26 June One by one, countries begin to roll back restrictions on business and travel. Airports in
Paris and London reopen.
• 28 September The global death toll from the COVID-19 pandemic passes one million. Cooler weather
pushes people indoors, where the virus spreads more easily.
• 26 October Countries across Europe start to impose fresh national lockdowns in the face of a
second pandemic wave.

INTRODUCTION
Key events so far (2)
• 16-23 November BioNTech and Pfizer; Moderna, Sputnik V and AstraZeneca announce phase 3 vaccine
trial results with high effectiveness.
• 5 December Russia is the first country in the world to start distributing a COVID-19 vaccine. The UK
follows on 8 December, while the US starts its vaccine roll-out on 14 December.
• 16 December Germany goes into a strict lockdown that will last through to 10 January. Other
European countries, including the Netherlands and the Czech Republic, follow Germany
into strict lockdowns over the Christmas period.

INTRODUCTION
Only partial recovery expected in 2021
▪ The aggregate global real GDP growth baseline Global Real GDP Growth Baseline
forecast has remained largely unchanged since Q3 Forecast 2014-2021
2020, with a projected contraction of 4.7% in 2020 (with
a plausible range of a 4.2-5.2% decline), followed by World
5.1% growth in 2021 (with a plausible range of 3.5-
6.5%).
Advanced Economies
▪ Advanced economy estimates for 2020 growth have,
however, improved on average by one percentage Developing & Emerging
point, mainly due to faster economic recoveries in Q3 Economies
and a more relaxed attitude towards pandemic
restrictions in the US. In contrast, overall real GDP US
growth for 2020 in developing economies has been
downgraded by 0.7 percentage points, despite
improving outlooks for Brazil and China. This reflects China
the much worse than expected effects of the pandemic

in India. Eurozone
▪ The end of 2020 is seeing the emergence of regional
second waves, especially in Europe and North America. -10 -5 0 5 10
The Eurozone and UK economies have had to resort to Real GDP growth, %
new lockdown measures to control fast-rising infection 2014-2018 average 2019 2020 2021
rates. The baseline forecast assumes these second
Source: Euromonitor International Macro Model
waves are contained in Q4 2020, and widespread Note: Global real GDP growth using PPP weights; figures for 2020
vaccine deployment occurs around mid-2021. onwards are forecasts. Forecasts updated on 10 November 2020.

INTRODUCTION
Global economic outlook remains tilted towards downside risks
▪ Recent news regarding vaccine development has been Global GDP 2019-2024
promising, with stage 3 results for two vaccines 120
suggesting around 90-95% effectiveness. At the time of
writing this report, the UK had already started vaccine 115
Global Real GDP Level 2019 = 100

distribution, with the US following on 14 December 2020. 110
▪ Some of the recent positive results are, however, still
105
preliminary. There are also major logistical hurdles in
successful widespread vaccine distribution, with the 100
WHO expecting only limited vaccine distribution in the
first half of 2021. Vaccinating most of the population in a 95
country could take 2-4 months beyond that. 90

Complications in vaccine development and deployment
could cause significant vaccination delays in 2021, or 85
even push widespread distribution into 2022. 80

▪ As a result of these developments, we have increased 2019 2020 2021 2022 2023 2024
the probability of the baseline forecast to 46-56%, while Euromonitor Baseline pre COVID-19 pandemic
reducing the probability assigned to the delayed vaccine Euromonitor Baseline
distribution COVID-19 Pessimistic 2 and 3 scenarios to COVID-19 Pessimistic1
around 17%. Ongoing high risks of severe global second COVID-19 Pessimistic2
or even third waves before comprehensive vaccination COVID-19 Pessimistic3
are captured by the COVID-19 Pessimistic 1 scenario.
Source: Euromonitor International Macro Model
This scenario is assigned a 27-37% probability as of Q4 Note: Global real GDP growth using PPP weights; figures for 2020
2020. onwards are forecasts. Forecasts updated on 10 November 2020.

INTRODUCTION
COUNTRY INSIGHTS
CONCLUSION
The Recovery Index
▪ Euromonitor International’s Recovery Index is a composite index which provides a quick overview of
economic and consumer activity, and helps businesses predict recovery in consumer demand in 48 major
economies. The index takes into consideration total GDP and factors that determine consumer spend –
employment, consumer spending, retail sales and consumer confidence. Index scores measure the change
relative to the average per quarter for 2019.
▪ A full overview of the methodology used to calculate the final index score can be found at the end of this
report.
Recovery Index Breakdown
Category Weighting Focus

Economic Activity 20% Tracks and forecasts the level of real GDP, as this is a broad measure
of everything that workers and capital produce in a country.
Employment 20% Looks at the employed population and average actual weekly working
hours in each quarter, as these indicators help track households’
primary source of income besides government financial support.
Consumer Spending 25% Looks at private final consumption expenditure in each quarter, as this
is officially the best measure of consumer spending in real terms.
Retail Sales 25% Focuses on seasonally-adjusted real retail sales data as a timely
indicator of economic performance and strength of consumer spending.
Consumer Confidence 10% Looks at the standardised consumer confidence index to see how
consumers across countries feel about their current situation and when
they will start feeling better about the future.

Index ranking based on Q4 2020 scores: 1 to 10
Rank Country Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2020 2020 2020 2020 2021 2021 2021 2021
1 Sweden 98.5 92.2 108.8 110.9 113.7 113.6 114.7 117.0
2 Switzerland 102.8 86.2 93.1 107.1 109.7 109.6 111.2 112.5
3 China 91.7 98.7 102.7 104.9 105.4 106.5 107.8 108.7
4 Australia 94.2 85.7 87.9 104.0 103.6 100.3 101.3 103.9
5 Turkey 101.4 90.5 98.6 102.7 110.5 111.4 119.8 125.7
6 Norway 92.6 88.6 90.9 99.8 100.3 101.7 102.7 101.6
7 Finland 92.6 90.0 93.2 99.1 116.3 115.5 119.1 125.1
8 Malaysia 95.3 88.5 96.1 98.8 100.6 98.7 103.7 106.0
9 Lithuania 99.1 90.6 99.4 98.8 99.6 99.5 102.2 102.5
10 Belgium 98.6 84.1 92.3 97.9 102.6 105.2 109.4 111.0
Note: A score of 100 and over indicates a full recovery in which economic output, labour market and consumer spending all return to/exceed 2019 levels.

2020 2020 2020 2020 2021 2021 2021 2021
11 Latvia 97.5 84.1 93.9 96.9 97.8 95.1 98.7 101.0
12 Thailand 97.2 88.8 94.4 96.4 96.3 95.8 99.1 99.9
13 Denmark 96.3 88.4 93.2 96.2 99.0 101.1 101.7 102.4
14 Taiwan 99.2 91.6 95.6 95.9 95.3 95.3 98.0 97.8
15 Germany 98.0 87.0 95.4 95.9 98.3 98.5 100.7 101.5
16 Argentina 104.0 91.2 93.8 95.3 99.7 99.3 99.5 101.8
17 Estonia 100.8 87.5 92.4 95.2 96.1 92.9 97.1 100.4
18 US 100.2 86.2 92.1 95.0 97.3 97.4 99.0 100.2
19 Hungary 101.4 87.0 94.8 94.8 97.9 96.7 99.1 101.2
20 Russia 104.8 81.8 89.6 94.7 99.0 94.3 95.2 101.3

2020 2020 2020 2020 2021 2021 2021 2021
21 Croatia 99.7 84.4 92.3 94.0 96.1 93.9 96.1 98.6
22 South Korea 92.3 88.3 88.7 94.0 98.5 102.6 104.0 105.4
23 Poland 99.9 84.9 93.3 93.9 95.5 94.2 97.1 98.6
24 Ukraine 100.4 89.9 92.9 93.8 96.0 93.7 95.1 96.0
25 Bulgaria 100.8 85.0 87.4 93.0 95.8 95.2 96.6 100.0
26 Greece 100.2 87.6 92.3 92.9 94.2 92.7 96.6 97.8
27 Netherlands 100.1 86.2 92.0 92.7 97.2 96.8 98.6 101.1
28 Austria 97.2 83.6 94.3 92.3 93.8 93.3 95.1 97.9
29 Portugal 98.7 80.4 88.5 92.0 94.6 91.3 95.6 99.0
30 New Zealand 98.8 84.1 88.9 92.0 96.9 97.5 106.1 108.9

2020 2020 2020 2020 2021 2021 2021 2021
31 France 94.9 81.9 92.1 91.9 93.7 93.9 97.4 98.2
32 Slovenia 94.6 80.5 88.1 91.8 93.5 92.8 95.3 97.4
33 Romania 102.2 85.9 92.3 91.7 94.8 90.3 92.3 95.1
34 Brazil 96.0 84.3 92.5 91.5 92.7 90.6 93.6 95.3
35 Czech Republic 98.3 89.1 93.8 91.4 93.0 93.6 95.6 97.2
36 Japan 93.0 84.8 88.0 91.1 96.7 93.8 98.1 99.9
37 Colombia 96.7 81.7 90.0 91.1 94.1 88.9 94.9 100.7
38 Slovakia 98.9 85.9 92.4 90.0 92.8 93.5 95.9 97.1
39 Canada 97.6 80.2 87.8 89.9 91.0 89.5 92.5 93.8
40 Mexico 99.5 82.5 86.9 89.8 92.1 92.2 93.6 93.9

Index ranking based on Q4 2020 scores: Remaining countries
2020 2020 2020 2020 2021 2021 2021 2021
41 Indonesia 99.1 85.6 86.4 88.9 91.4 90.2 93.0 95.4
42 Ireland 99.4 82.8 87.9 88.7 92.5 89.3 95.0 96.7
43 India 94.8 74.7 84.4 88.3 89.9 90.0 93.6 95.3
44 UK 101.8 77.4 87.7 86.6 88.9 86.4 90.7 92.0
45 Chile 90.5 75.7 87.8 86.5 89.6 82.8 89.5 90.6
46 South Africa 94.4 76.9 87.9 85.6 87.7 81.8 86.8 87.9
47 Italy 93.0 82.5 95.5 85.3 88.9 89.9 92.0 95.2
48 Spain 94.6 75.6 86.6 82.9 86.2 83.1 87.4 89.5

Recovery landscape in Q4 2020
▪ As of Q4 2020, five countries Top 10 Countries by Recovery Index Score in Q4 2020

– Sweden, Switzerland, 115
China, Australia and Turkey–
are expected to have Sweden
recorded Recovery Index
Recovery Index Score Q1-Q4 2019 average = 100

110
scores above 100. These
China
economies appear to have Switzerland
recovered due to a strong

come-back in consumer 105
confidence. China is, Australia
however, the only country in
Turkey
this list where other economic
activities – consumer 100
Norway
spending, retail sales, GDP Finland

Lithuania
and labour market – have Belgium
Malaysia
surpassed 2019 levels.

95
▪ Australia is on track to
rebound strongly as the
country has suppressed the
second wave of the pandemic 90
and infection rates remain -12 -10 -8 -6 -4 -2 0 2 4
low, providing confidence for Real GDP growth in 2020, %
consumers and businesses. Note: The bubble size indicates the country’s GDP in 2019

INTRODUCTION
COUNTRY INSIGHTS
CONCLUSION
Prospects of recovery are uneven
▪ In Q4 2020, amid further Recovery Index in Selected Economies Q1 2020 – Q4

local/regional waves of COVID- 2021
19 infections that necessitated 120
Forecasts
renewed restrictions and
lockdown measures, 13 out of the
48 economies covered by 110
Euromonitor International’s
Recovery Index are expected to
Q1-Q4 2019 average = 100

have recorded worsening
recovery index scores compared 100
to the previous quarter.

▪ On the other hand, overall
economic and consumer 90
spending conditions in Australia,
China, Sweden, Switzerland and
Turkey are expected to have fully
80
recovered in Q4 2020. China,
Sweden and Switzerland saw
earlier exits from their lockdowns,
while effective virus containment 70
2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021
seems to have led to recoveries average
driven by household spending in Brazil China Germany India Italy Japan UK US
Australia and Turkey. Source: Euromonitor International Recovery Index

Activity in services sector adversely impacted by new lockdowns
▪ Real GDP in almost all major Real GDP Index in Selected Economies Q1 2020 – Q4
economies is estimated not to 2021
have recovered in Q4 2020. 120
Forecasts
▪ China and Taiwan are the only
exceptions among the 48
economies covered by the 110
Recovery Index. Having suffered
the pandemic’s blow earlier than
Q1-Q4 2019 average = 100

other countries, China has seen
100
its real GDP recover strongly
after the lockdown in Q1, driven
by industrial production and
exports. Meanwhile, Taiwan’s 90
success at keeping the virus
under control has helped to spur
the island’s economic activity.
80
▪ At the other end of the scale,
economic activity in Spain and
Italy has been particularly hard
70
hit, as new restrictions to battle 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021
the second wave have adversely average
impacted the services sector in Brazil China Germany India Italy Japan UK US
these countries. Source: Euromonitor International Recovery Index

Deteriorating labour market conditions
▪ In Q4 2020, labour market Employment Index in Selected Economies Q1 2020 –

conditions are expected to have Q4 2021
deteriorated in comparison to the 104
previous quarter in 36 out of the 48 Forecasts
economies covered by
102
Euromonitor’s Recovery Index.
Further local/regional waves of
COVID-19 infections that led to 100
Q1-Q4 2019 average = 100

new restrictions and lockdown
measures in Q4 2020 have hurt
98
business activity and caused
losses in working hours and jobs.
96
▪ In the US, after significant
improvements in the labour market
in the late spring and summer, the 94
recovery has lost momentum.
▪ Meanwhile, Brazil stands outs on 92
the chart, as its labour market
conditions appear to be strong, but
90
this is relative to the average for 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021
2019, when the country’s labour average
market was already weak before Brazil China Germany India Italy Japan UK US
the pandemic. Source: Euromonitor International Global Recovery Tracker

Consumer spending yet to recover in most countries
▪ In most countries in Q4 2020, Real Private Final Consumption Expenditure Index in

consumer spending is estimated Selected Economies Q1 2020 – Q4 2021
to have improved relative to the
120
previous quarter, although it is not Forecasts
expected to have rebounded to

pre-pandemic levels. 110
▪ In China, where the recovery in
consumer spending strengthened
Q1-Q4 2019 average = 100

in Q4, the Golden Week holiday 100
generated 637 million domestic

tourist trips and USD69.5 billion in
90
domestic tourist spend, according
to national statistics. The eight-day
holiday in October is an important 80
gauge of consumer demand.
▪ In contrast, Italy’s consumer
spending is estimated to have 70
seen a reverse in the

improvement recorded in the
60
previous quarter, as the tightening 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021
of pandemic restrictions in Q4 average
reduced spending opportunities, Brazil China Germany India Italy Japan UK US
especially in the hospitality sector. Source: Euromonitor International Global Recovery Tracker

Retail sales recovery is underway
▪ As the pandemic has generated Real Retail Sales Index in Selected Economies Q1 2020
headwinds for overall consumer – Q4 2021
spending, retail sales – the 120
Forecasts
purchase of goods for direct
consumption – have experienced
110
some tailwinds as consumers shift
some of their spending from
Q1-Q4 2019 average = 100

services to goods. 100
▪ In Q4 2020, real retail sales are

estimated to have rebounded to
90
and even exceeded pre-pandemic
levels in 31 out of the 48
economies covered by 80
Euromonitor’s Recovery Index.
▪ Real retail sales in Italy (the worst 70
performer on this score) are
estimated to have not recovered
to pre-pandemic levels, and have 60
2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021
even deteriorated in Q4 2020 average
compared to the previous quarter, Brazil China Germany Italy Japan UK US
as new pandemic restrictions
Source: Euromonitor International Global Recovery Tracker
dampened retail activity in the Note: Real Retail Sales Index for India is not available. In the final calculation, we use private final
final quarter of 2020. consumption expenditure as a proxy for real retail sales in India.

Consumer confidence remains low
▪ In Q4 2020, 33 out of the 48 Consumer Confidence Index in Selected Economies

economies covered by the Q1 2020 – Q4 2021
160
Recovery Index saw Forecasts
improvements in consumer
140
sentiment compared to the
previous quarter, but consumer 120
confidence is estimated to have
Q1-Q4 2019 average = 100

remained below the historical 100
average in most countries.
Uncertain job prospects and 80
anxiety about personal finances
are key factors keeping 60
consumer confidence low.
40
▪ Of the major economies, the UK
and Italy are likely to have seen 20
drops in consumer confidence in
Q4 relative to Q3, as consumers 0
in these two countries were 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021
average
particularly pessimistic about
Brazil China Germany India Italy Japan UK US
their financial circumstances, Source: Euromonitor International Global Recovery Tracker
reflecting the high uncertainty Note: India's graph is flat because its consumer confidence levels are extremely negative during the full
over jobs and business survival forecast period. Hence, we apply an exception where consumer confidence indices leading to cumulative
probabilities below 5.0% are set at 5.0%, since the normal distribution is less reliable in capturing such
in a challenging environment. extreme outcomes.

INTRODUCTION
COUNTRY INSIGHTS
CONCLUSION
COUNTRY INSIGHTS
Brazil: resumption of consumer spending may promote recovery
▪ The Recovery Index score for Brazil in Q4 2020 is Brazil: Real Private Final Consumption
estimated to have risen to 91.5, from 90.2 in the Expenditure growth Q4 2019 – Q4 2021
previous quarter. 15%
10%
▪ Monetary and fiscal stimuli are having some
Y-o-y real growth

5%
positive effects on economic activity, causing a 0%
slight rebound in Q4 relative to the previous -5%
quarter; however, real GDP, consumer spending -10%
and retail sales are all significantly below pre- -15%
pandemic levels. Even though consumer demand Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2019 2020 2020 2020 2020 2021 2021 2021 2021
is projected to increase, full recovery might be
Source: Euromonitor International from national statistics/Eurostat/OECD/IMF
prolonged due to record unemployment. Note: Data for Q4 2020-Q4 2021 are forecasts
▪ Retail sales, recreation, entertainment and other Brazil: Change in Visits to Grocery and
service sectors have been hit hardest by the Pharmacy Outlets 17 February – 4 December
% change relative to baseline

pandemic-related restrictions; however, as the 2020
30
lockdown measures are easing and many 20
Brazilians are getting income transfers from the 10
0
government aid programme, a rise in visits to -10
grocery stores can be seen. As of 4 December, -20
-30
visits to grocery stores and pharmacies in Brazil -40
were 23% higher than the average for the same
day of the week for the five-week period 3 January
Source: Google Community Mobility Trends, Out World in Data
– 6 February 2020, before the pandemic outbreak. Note: Baseline = average for same day of week, 3 Jan-6 Feb 2020.
Data are not seasonally adjusted. The dotted line represents the trend.

COUNTRY INSIGHTS
China: further recovery will be driven by consumer spending
▪ China’s recovery index already exceeded the China: Economic Activity Q1 2020 – Q4 2021
2019 average in Q3, and is estimated to have 120
increased further in Q4 2020. Economic activity 115
Index (2019 = 100)

110
(measured by real GDP) in Q4 2020 is
105
estimated at around 8% above the average
100
2019 level – close to pre-pandemic projections 95
– though it has seen slower growth compared 90
to Q3. 85
▪ Consumer spending and retail sector 80

2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
recoveries have been slower but are now Average 2020 2020 2020 2020 2021 2021 2021 2021
accelerating, especially for retail. Recent Recovery Index Economic Activity
surveys of short-term economic activity (eg China: Consumer Spending and Confidence
purchasing manager indices) indicate that the Q1 2020 – Q4 2021
economic recovery has accelerated in private
Index (2019 = 100)
120
sector services and consumer sectors, 110
100
compared to the earlier more manufacturing 90
and infrastructure investment-driven recovery 80
phase. 70
60
▪ In Q4 2020 – Q1 2021, China’s economy is 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Average 2020 2020 2020 2020 2021 2021 2021 2021
expected to have recovered fully from the
Recovery Index Consumer Spending
pandemic shock in 2020, with further growth in Retail Sales Consumer Confidence
2021 mainly reflecting the established long- Source: Euromonitor International from national statistics, Eurostat
term growth trend of the economy. Note: Data for Q4 2020-Q4 2021 are forecasts.

COUNTRY INSIGHTS
Germany: a slight improvement from the previous quarter
▪ The Recovery Index score for Germany is Germany: Real Private Final Consumption
estimated to have reached 95.9 in Q4 2020 – a Expenditure Growth Q4 2019 – Q4 2021
slight improvement from 95.4 in the previous 15
Y-o-y real growth, %

quarter. 10
▪ Germany’s progress towards a recovery has been 5
supported by exports, which are estimated to have 0
risen 23% year-on-year in Q4 2020, largely as a -5

result of an increase in new manufacturing orders -10
from China. Also in Q4, consumer demand is -15
expected to have continued to strengthen, but not Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2019 2020 2020 2020 2020 2021 2021 2021 2021
to have fully recovered to the 2019 level. This
Source: Euromonitor International from national statistics, Eurostat
improvement was largely due to consumers Note: Data for Q4 2020-Q4 2021 are forecasts.
stocking up on essentials ahead of the second Germany: Change in Visits to Retail and
lockdown. Recreation Places, 17 February – 4

▪ Across Germany, restaurants, bars, entertainment December 2020
20
venues and gyms have been closed since 2 0
November in an attempt to slow the spread of the -20
-40
pandemic. During November to early December, -60
visits to retail and entertainment venues in -80
Germany were down by around a third compared
to the average for the five-week period 3 January –
6 February 2020, before the pandemic outbreak. Source: Google Community Mobility Trends, Our World in Data
Note: Baseline = average for same day of week, 3 Jan – 6 Feb 2020. Data are
not seasonally adjusted. The dotted line represents the trend.

COUNTRY INSIGHTS
India: a COVID-19 spike hinders recovery progress
▪ The Recovery Index score for India is estimated to India: Annual Real GDP Growth Q4 2019
have reached 88.3 in Q4 2020, an improvement – Q4 2021
30
from 84.4 in the previous quarter.
Y-o-y real growth, %

20
▪ A large stimulus package aimed at rescuing
companies and saving jobs, combined with interest 10
rate stabilisation, is supporting India’s progress 0

towards a steady economic recovery, although -10
significant challenges remain. In Q4 2020, India’s -20
real GDP is forecast to have risen by 3.5% over the -30
previous quarter, but it is still expected to be 9.8% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2019 2020 2020 2020 2020 2021 2021 2021 2021
lower than a year earlier. Although employment is Source: Euromonitor International from national statistics, Eurostat
expected to recover to pre-pandemic levels in early Note: Data for Q4 2020-Q4 2021 are forecast.
2021, consumer spending and overall economic India: Change in Visits to Public
activity will take longer to recover. Transport Stations 17 February – 6

▪ India imposed only one nationwide lockdown (from December 2020
20
late March through to May) which was relaxed in 0
phases; however, amid a surge in coronavirus -20
-40
cases, several states across the country
-60
implemented fresh restrictions and curfews in -80
November. As of 6 December, the number of visits
to public transport stations was 17% lower than the
average for the five-week period of 3 January – 6 Source: Google Community Mobility Trends/Our World in Data
Note: Baseline = average for same day of week, 3 Jan – 6 Feb 2020. Data
February 2020. are not seasonally adjusted. The dotted line represents the trend.

COUNTRY INSIGHTS
Japan: positive and negative developments offset each other
▪ The Recovery Index score for Japan in Q4 Japan: Growth in Real Retail Sales Q4 2019
2020 is expected to have reached 91.1, an – Q4 2021
4
improvement from 88.0 in the previous quarter.
Year-on-year growth, %
▪ In Q4 2020, the Japanese economic outlook 0
has remained stable, with positive and -4

negative developments roughly offsetting each
-8
other. On the positive side, private
consumption and retail sales have been strong, -12
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
due to a massive government fiscal stimulus 2019 2020 2020 2020 2020 2021 2021 2021 2021
and a rebound in exports as the Chinese Source: Euromonitor International from national statistics, Eurostat, OECD, IMF
economy picked up significantly. A third wave Note: Data for Q4 2020-Q4 2021 are forecasts.
of the COVID-19 pandemic in the country is, Japan: Change in Visits to Retail and
however, weighing negatively on the outlook, Recreation Places 4 March – 4 December

although the wave shows signs of subsiding. 2020
0
▪ Visits to retail and recreation places have -5
stabilised in Q4. They remain below the -10
-15
baseline but are not declining as much as in -20
-25
April and May – during and after the first wave -30
of the infections in Japan. The effects on the -35
-40
economy of this third wave are likely to be
limited and similar to the effects of the second
Source: Google Community Mobility Trends, Our World in Data
wave of July and August. Note: Baseline = average for same day of week, 3 Jan – 6 Feb 2020. Data are not
seasonally adjusted. The dotted line represents the trend.

COUNTRY INSIGHTS
US: slowing recovery but consumer confidence improving
▪ The recovery index is expected to increase US: Economic Activity and Employment Q1
further in Q4 2020, despite a likely slowdown in 2020 – Q4 2021
105
2019 average = 100

economic activity, due to rising consumer
confidence. 100
▪ After a strong resurgence in economic activity 95

(real GDP), consumer spending and employment
90
in Q3 2020, we expect the worsening pandemic
in Q4 to cause a modest decline in economic 85
activity and spending. Employment is expected to

stagnate this quarter.
▪ However, news of successful COVID-19 vaccine Employment Economic Activity
tests in November and December have US: Consumer Spending and Confidence
significantly raised the likelihood of widespread Q1 2020 – Q4 2021
2019 average = 100

120
vaccination by mid-2021, and reduced 100
uncertainty about the end of the pandemic. 80
Together with expectations of a new fiscal 60
40
stimulus package being agreed by early 2021, 20
this has boosted consumer confidence in Q4. 0
▪ Economic activity and consumer spending are
expected to be slightly above the 2019 average
by Q4 2021; however, this would still leave them
Consumer Spending Retail Sales Consumer Confidence
around 4% below pre-pandemic forecasts.
Source: Euromonitor International from national statistics
Note: Data for Q4 2020 – Q4 2021 are forecast

COUNTRY INSIGHTS
US: activity levels decline in a second wave but at a lower rate
▪ In early December 2020, Google Mobility US: Google Mobility Trend Relative to
reports showed around 20% lower activity at January-February 2020
retail and recreation locations relative to pre- 30
pandemic levels in early 2020. Grocery and
pharmacy location movement was around 8% 20
below the level during the five week period of 3

10
January – 6 February 2020, prior to the
pandemic. 0
▪ Lower activity levels in recent weeks compared
to Q3 reflect the worsening state of the -10
%
pandemic in the US at the end of 2020, with
-20
infection and death rates exceeding those of
the two earlier waves. As a result, social
-30
distancing restrictions have been tightened in
many states, especially in California, which is -40
seeing lockdowns in most areas. The current
activity declines are much lower in magnitude -50
than during the first wave in the spring of 2020;
however, given the unprecedented COVID-19
infection and death rates, there is a significant
risk of a stronger decrease in retail and Retail and Recreation Grocery and Pharmacy
recreation sector activity in Q1 2021. Source: Google Mobility Reports, Our World in Data

COUNTRY INSIGHTS
UK: economy hit by lockdown and increased Brexit uncertainty
▪ The Recovery Index score for the UK is estimated UK: Annual Real GDP Growth Q4 2019
to have reached 86.6 in Q4 2020, a decline from – Q4 2021
20
87.7 in the previous quarter. 15
Y-o-y growth, %
▪ The second lockdown implemented in England in 10
5
November, and increased Brexit uncertainty are 0
-5
expected to have weighed on economic activity in -10
the last quarter of 2020. The economy is estimated -15
-20
to have grown by only 1.3% in real terms in Q4 -25
2020 over the previous quarter, down from 15.5% in Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2019 2020 2020 2020 2020 2021 2021 2021 2021
Q3 2020 when the country exited the first lockdown.
Source: Euromonitor International from national statistics, Eurostat, OECD,
Compared to the same period of the previous year, IMF
the size of the UK economy in Q4 2020 is estimated Note: Data for Q4 2020 – Q4 2021 are forecasts
to be 12% smaller. Given the fact that the services UK: Change in Visits to Retail and
sector accounts for around 80% of the UK economy, Recreation Places 17 February – 4

the lockdowns and social distancing measures have December 2020
severely impacted total output. 20
0
▪ As of 4 December, visits to retail and recreation -20
-40
venues across the country were still 42% lower than -60
-80
the average for the five-week period 3 January – 6 -100
February 2020 before the pandemic outbreak.
Nevertheless, the roll-out of a vaccine in December
Source: Google Community Mobility Trends, Our World in Data
offers hope of a return to normal, especially for the Note: Baseline = average for same day of week, 3 Jan – 6 Feb 2020. Data
hospitality sector. are not seasonally adjusted. The dotted line represents the trend.

INTRODUCTION
COUNTRY INSIGHTS
CONCLUSION
CONCLUSION
A slower recovery is now more likely
In Q3, most countries were able to relax lockdown measures, which led to a rapid recovery; however, the virus
came in a second wave in Q4, leading to a slowdown in economic recovery. Nevertheless, the economic effects of
the second wave are likely to be more moderate compared to the first wave.
After Q4 2020, the speed of the economic recovery will depend on two factors. In the short term, how fast countries
will be able to suppress the second wave of the pandemic will decide how deep the current setback in recovery will
be. In the medium term, vaccine distribution will lead to a stronger recovery once herd immunity is achieved across
countries.
Under the baseline/most likely scenario, economic conditions and consumer activity in most countries will remain
below 2019 levels at the end of 2021. It is important for businesses to factor this recovery timeline into their
planning and strategise accordingly.
The baseline forecast is subject to severe downside risks due to worse than expected pandemic wave and
lockdown effects, as well as possible delays in vaccine deployment in 2021. These risk scenarios are now assigned
around a 49% probability in our forecasts and would lead to a much slower recovery.

CONCLUSION
Key country insights
Even though consumer

Consumer spending and retail
demand is projected to
sector recoveries have been
increase, a full recovery might
slower in Q3 but are
be prolonged due to record
accelerating in Q4.
unemployment.
A spike in COVID-19 cases led

Germany’s progress towards a
to fresh restrictions in several
recovery has been supported
states in Q4, hindering the
by strong exports.
progress of the recovery.
In Q4 2020, the Japanese

The worsening pandemic in
economic outlook has
Q4 will cause a modest
remained stable, with positive
decline in economic activity
and negative developments
and spending.
roughly offsetting each other.
The second lockdown and

increased Brexit uncertainty
weighed negatively on
economic activity in the last
quarter of 2020.

CONCLUSION
Outlook
▪ The global outlook has improved slightly since the Economy Quarter when economy
Q3 report, with 23 out of the 48 countries covered by reaches 2019 levels
the Euromonitor Recovery Index expected to see
their economies rebound to 2019 levels in Q4 2021, Brazil Not expected before
compared to 20 economies in the Q3 report. 2022
▪ Effective and widespread vaccine distribution should China Q3 2020
bring the end of the pandemic; however, two
Germany Q3 2021
challenges remain. The first is preventing significant
rises of infections before widespread immunisation India Not expected before
occurs. To prevent rises in infections, governments 2022
are likely to introduce strict lockdowns during winter
2021. Secondly, while Russia, the UK and the US Japan Not expected before
have started vaccine distribution, the path to herd 2022
immunity is long and it is likely to take until at least US Q4 2021
mid-2021 in these countries to provide vaccination to
a significant proportion of the population. In other UK Not expected before
countries, the process might be prolonged due to 2022
supply shortages of vaccines. Note: Data refer to the quarter in which our Recovery Index reaches 100,
and are subject to revisions.
▪ Overall, the outlook is improving: additional waves of
the pandemic will leave a smaller mark on economic
developments as businesses and individuals adapt.
Nevertheless, the health crisis is not over yet and
economic recovery is likely to be fragile.

INTRODUCTION
DEEP DIVE INTO MAJOR ECONOMIES
CONCLUSION
APPENDIX: INDEX METHODOLOGY AND DEFINITIONS
Recovery Index Methodology
▪ The goal of the index is to provide a summary measure of the state of the economy relative to pre-COVID-
19 economic conditions, especially for consumer spending conditions. Each indicator is defined relative to a
base of 100 for its average level over Q1-Q4 2019. The Recovery Index is a weighted average of several
indicators of economic activity, employment and consumer confidence.
S1)
For all periods t = 2019Q1,…, 2021Q4,
For all Indicators0_k k = 1,…, N,
Indicator_kt = 100*Indicator_k0t/(sum(Indicator_k0s , s = 2019Q1,…,2019Q4)/4)
S2)
For all periods t = 2019Q1,…, 2021Q4,
RI_t = sum(Indicator_kt*w_k, k=1,..,N). sum(w_k) = 1.
▪ Consumer confidence indices are first standardised into z-scores: deviations from the historical average
relative to the historic standard deviation. The z-score is transformed into the cumulative probability of
confidence levels below the z-score (the cumulative distribution function) using a normal distribution.
Afterwards we define the transformed consumer confidence series relative to its average over Q1-Q4 2019.
▪ Consumer confidence indices leading to cumulative probabilities below 5.0% are set at 5.0%, since the
normal distribution is less reliable in capturing such extreme outcomes. For countries in which consumer
confidence in Q3 2020 is 5% above the 2019 average, we reduce the weight of consumer confidence in the
index from 10% to 5%. This reflects a potential lower reliability in these situations of consumer confidence
as a predictor of consumer spending.

Recovery Index Indicators and Weights
Sub-
Category
Category Indicator category Score
weight
weight
Current quarter's real GDP/Q1-Q4 2019 average
Economic activity Total Real GDP 20%
real GDP*100
Employed Current quarter's employed population/employed
Employment 20% 50%
population population for Q1-Q4 2019 average*100
Actual weekly Current quarter's actual weekly working hours/
50%
working hours 2019 full-year average*100
Real Private Final
Consumer Consumption Current quarter's real PFCE/Q1-Q4 2019 average
25%
spending Expenditure real PFCE*100
(PFCE)
Real retail sales Current quarter's real retail sales index/Q1-Q4
Retail sales 25%
index 2019 average real retail sales index *100
Standardised consumer confidence z-score =
(consumer confidence –
average)/standard_deviation.
Z-score is transformed into cumulative probability
Consumer
Consumer of lower confidence outcomes using Normal(0,1)
confidence index, 10%
confidence distribution.
standardised
RI consumer confidence indicator =
(current period consumer confidence probability/
Q1-Q4 2019 average consumer confidence
probability)*100

Scenario assumptions and definitions
COVID-19 COVID-19 COVID-19 COVID-19

Baseline/Most Likely Pessimistic1 Pessimistic2 Pessimistic3
2020 Global GDP [-5.2%, -4.2%] [-5.8%, -4.8%] [-6%, -5%] [-6.7%, -5.2%]
growth
2021 Global GDP [3.5%, 6.5%] [-0.7%, 2%] [-3.3%, -0.8%] [-7%, -4%]
growth
Probability 46-56% 27-37% 10-20% 1-3%
Assumptions
Global infection rate 1-15% 5-25% 10-35% 10-40%
Infection mortality rate 0.3-1.3% 0.3-1.3% 0.5-2% 0.5-2%
COVID-19 social 3-5 quarters 5-7 quarters 8-10 quarters 9-12 quarters
distancing effects (since
start of pandemic)
Number of COVID-19 1 main global pandemic 2 or 3 global 2 to 4 global 3 to 5 global
waves infection wave in 2020 pandemic infection pandemic waves in pandemic waves
with local/regional 2nd waves over 2020- 2020-2021. in 2020-2022.
waves. 2021.
Business and consumer 10-40th percentile of 5-25th percentile of 1-15th percentile of 1-5th percentile of
confidence indices fall to historical values historical values historical values historical values
Risky borrowing rates 2-9 percentage points Rise by 1-5 Rise by 2-8 Rise by 4-10
above pre C19 forecast percentage points percentage points percentage points
above baseline above baseline above baseline

FOR FURTHER INSIGHT PLEASE CONTACT
Aiste Navaityte
Senior Data Analyst, Economies and Consumers
Aiste.Navaityte@Euromonitor.com
An Hodgson
Head of Income and Expenditure
An.Hodgson@Euromonitor.com
@An_Hodgson
Daniel Solomon, PhD

Senior Economist, Economies and Consumers
Daniel.Solomon@Euromonitor.com
Giedrius Stalenis
Economist, Economies Finance and Trade
Giedrius.Stalenis@Euromonitor.com
Marija Aciene
Senior Data Analyst, Economies and Consumers
Marija.Aciene@Euromonitor.com
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GLOBAL RECOVERY TRACKER: Q4 2020

▪ Euromonitor International’s Global Recovery Tracker – a quarterly report Disclaimer

© Euromonitor International GLOBAL RECOVERY TRACKER: Q4 2020 PASSPORT 3

© Euromonitor International GLOBAL RECOVERY TRACKER: Q4 2020 PASSPORT 4

Key events so far (1)

• 14 February The first COVID-19 death in Europe is announced (in France).

© Euromonitor International GLOBAL RECOVERY TRACKER: Q4 2020 PASSPORT 5

Key events so far (2)

© Euromonitor International GLOBAL RECOVERY TRACKER: Q4 2020 PASSPORT 6

Only partial recovery expected in 2021

the much worse than expected effects of the pandemic

© Euromonitor International GLOBAL RECOVERY TRACKER: Q4 2020 PASSPORT 7

Global economic outlook remains tilted towards downside risks

Global Real GDP Level 2019 = 100

country could take 2-4 months beyond that. 90

even push widespread distribution into 2022. 80

© Euromonitor International GLOBAL RECOVERY TRACKER: Q4 2020 PASSPORT 8

The Recovery Index

Recovery Index Breakdown

Category Weighting Focus

© Euromonitor International GLOBAL RECOVERY TRACKER: Q4 2020 PASSPORT 10

Index ranking based on Q4 2020 scores: 1 to 10

1 Sweden 98.5 92.2 108.8 110.9 113.7 113.6 114.7 117.0

2 Switzerland 102.8 86.2 93.1 107.1 109.7 109.6 111.2 112.5

3 China 91.7 98.7 102.7 104.9 105.4 106.5 107.8 108.7

4 Australia 94.2 85.7 87.9 104.0 103.6 100.3 101.3 103.9

5 Turkey 101.4 90.5 98.6 102.7 110.5 111.4 119.8 125.7

6 Norway 92.6 88.6 90.9 99.8 100.3 101.7 102.7 101.6

7 Finland 92.6 90.0 93.2 99.1 116.3 115.5 119.1 125.1

8 Malaysia 95.3 88.5 96.1 98.8 100.6 98.7 103.7 106.0

9 Lithuania 99.1 90.6 99.4 98.8 99.6 99.5 102.2 102.5

10 Belgium 98.6 84.1 92.3 97.9 102.6 105.2 109.4 111.0

© Euromonitor International GLOBAL RECOVERY TRACKER: Q4 2020 PASSPORT 11

Index ranking based on Q4 2020 scores: 11 to 20

11 Latvia 97.5 84.1 93.9 96.9 97.8 95.1 98.7 101.0

12 Thailand 97.2 88.8 94.4 96.4 96.3 95.8 99.1 99.9

13 Denmark 96.3 88.4 93.2 96.2 99.0 101.1 101.7 102.4

14 Taiwan 99.2 91.6 95.6 95.9 95.3 95.3 98.0 97.8

15 Germany 98.0 87.0 95.4 95.9 98.3 98.5 100.7 101.5

16 Argentina 104.0 91.2 93.8 95.3 99.7 99.3 99.5 101.8

17 Estonia 100.8 87.5 92.4 95.2 96.1 92.9 97.1 100.4

18 US 100.2 86.2 92.1 95.0 97.3 97.4 99.0 100.2

19 Hungary 101.4 87.0 94.8 94.8 97.9 96.7 99.1 101.2

20 Russia 104.8 81.8 89.6 94.7 99.0 94.3 95.2 101.3

© Euromonitor International GLOBAL RECOVERY TRACKER: Q4 2020 PASSPORT 12

Index ranking based on Q4 2020 scores: 21 to 30

21 Croatia 99.7 84.4 92.3 94.0 96.1 93.9 96.1 98.6

23 Poland 99.9 84.9 93.3 93.9 95.5 94.2 97.1 98.6

24 Ukraine 100.4 89.9 92.9 93.8 96.0 93.7 95.1 96.0

25 Bulgaria 100.8 85.0 87.4 93.0 95.8 95.2 96.6 100.0

26 Greece 100.2 87.6 92.3 92.9 94.2 92.7 96.6 97.8

27 Netherlands 100.1 86.2 92.0 92.7 97.2 96.8 98.6 101.1

28 Austria 97.2 83.6 94.3 92.3 93.8 93.3 95.1 97.9

29 Portugal 98.7 80.4 88.5 92.0 94.6 91.3 95.6 99.0

© Euromonitor International GLOBAL RECOVERY TRACKER: Q4 2020 PASSPORT 13

Index ranking based on Q4 2020 scores: 31 to 40

31 France 94.9 81.9 92.1 91.9 93.7 93.9 97.4 98.2

32 Slovenia 94.6 80.5 88.1 91.8 93.5 92.8 95.3 97.4

33 Romania 102.2 85.9 92.3 91.7 94.8 90.3 92.3 95.1

34 Brazil 96.0 84.3 92.5 91.5 92.7 90.6 93.6 95.3

36 Japan 93.0 84.8 88.0 91.1 96.7 93.8 98.1 99.9

37 Colombia 96.7 81.7 90.0 91.1 94.1 88.9 94.9 100.7

38 Slovakia 98.9 85.9 92.4 90.0 92.8 93.5 95.9 97.1