Economic recovery in wealthy countries will be 'very robust' despite delta variant: Ian Bremmer

Max Zahn with Andy Serwer
3 min read
56

Goldman Sachs on Thursday cut its GDP forecast for the U.S., warning of continued supply chain disruption and heightened inflation caused by the COVID-19 delta variant.

But the bank still anticipates robust 6% growth for the U.S. economy this year.

The world's richest countries boast relatively high rates of vaccination that ensure strong economic growth, despite a wave of infections brought about by the delta variant, Ian Bremmer, Eurasia Group founder and political scientist, tells Yahoo Finance in a new interview.

Poor countries, however, will see the variant derail their return to normal economic activity, pushing them further behind their wealthy counterparts, he added.

"Ultimately, I think the economic rebound in the developed world is going to continue to be very robust," Bremmer said.

The eurozone last month beat estimates when it reported 2% growth in the second quarter, propelled by a relaxation of COVID-19 restrictions. This week, Japan reported its economy grew at a 1.3% annual rate last quarter — a sharp turnaround from the 0.9% contraction in the prior quarter.

The strong economic performance in wealthy countries owes largely to their relatively high rates of vaccination, Bremmer said. High and upper-middle-income countries have administered 83% of COVID-19 vaccine shots worldwide, while poor countries have injected only 0.3% of doses, according to the New York Times.

"The real problem here is a lack of interest and support in getting vaccines out to the poor countries in the world, and that means that they're going to get hit a lot worse economically," Bremmer says.

"The gap between rich and poor nations on the back of COVID is only growing," he said.

Roughly 199.3 million people in the U.S. have received at least one dose of the COVID-19 vaccine, and about 72.3% of adults have received at least one shot, the Centers for Disease Control and Prevention said on Wednesday.

While the CDC last month reinstated an indoor mask-wearing mandate, the U.S. has largely avoided the type of business shutdowns that hampered economic performance last year.

But recent data suggests the effectiveness of vaccines in preventing COIVD-19 infection may be waning. An examination of early data from six states showed that vaccinated people made up at least one in five newly diagnosed cases of the virus, the New York Times reported. The vaccines remain highly effective in preventing hospitalization and death, the figures showed.

"The United States has by far the best position in terms of vaccines," Bremmer said. "That doesn't mean that we are able to get everyone to take them. But still, we stockpiled a bunch of them early."

"I think that makes a big difference, and that has helped the United States have a more robust recovery than a lot of other places in the world," he added.

Bremmer, who founded the Eurasia Group in 1998, is the author of 10 books, including “Us vs Them: The Failure of Globalism." His forthcoming book is "The Crises We Need: How to Confront the Three Greatest Dangers of Our Time," which publishes in April.

[Read more: 4 reasons why Biden ‘failed’ in Afghanistan pull out: Ian Bremmer]

Bremmer contrasted the persistent economic activity in the U.S. with a targeted slowdown in China; last month the government imposed a lockdown for millions in the eastern city of Nanjing, where an outbreak showed 200 cases. Furthermore, last week, China shut down the world's third-busiest port as a precautionary measure after the identification of a COVID-19 case on site.

"They have zero tolerance for cases, so they lock everything down," Bremmer says. "In part, that's the authoritarian Chinese system and risk aversion. But in part, that's because Chinese vaccines really don't work well against delta."

"So, I mean, you've got a real problem," he adds.

Read more:

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, YouTube, and reddit.

Advertisement

Recommended Stories