Prospect of 2021


Prospect of 2021

By Sophie van Lith

The year that people were eager to say goodbye to, 2020, has finally come to an end. First of all, I would like to wish you a happy and healthy 2021. Let's hope that 2021 will bring us better things than 2020.

2021 is therefore a year in which many changes will and can take place. For example, the Democrat Joe Biden may replace the current president of the US this month. Not only the Americans themselves will be curious to see to what extent this future president will be able to change the US, the rest of the world is also watching how this change is responded to. For example, the economist is probably curious about the possible changes in the stock market, dollar exchange rate and much more. Elections for the House of Representatives in the Netherlands will also take place, in March 2021. Polls show us that once again our prime minister and his VVD have a good chance of becoming the biggest party. But Minister Hoekstra, who presented a historic budget deficit of more than 6% of the GDP last year, also wants to make a bid to become the prime minister as the new party leader of the CDA. The voter has more parties to choose from this year, no fewer than 89 parties have been registered for the elections, which is a record number.

For the economist, it will of course be a big question whether the economy will recover from the consequences of the pandemic this year. The GDP of the Netherlands shrank by 4.1 percent in the first three quarters of 2020 compared to the same three quarters in 2019. Not only the contraction of GDP could have consequences for 2021, as it turned out that there were way less bankruptcies last year than usual. Most likely as a result of the support packages from the government. Last summer, the Dutch government announced that it would continue this support for jobs and the economy in 2021. However, the support may also have negative effects. The CPB already warned in August against keeping so-called zombie companies alive. Those are companies that were already unhealthy at the core, but are still kept afloat by government support. These companies would normally go bankrupt in a crisis. Now that these companies are still being kept alive, that can disrupt the economy more.

However, 2021 is of course also the year in which vaccinations against COVID-19 will predominate. Vaccinations have already started in several countries and a start will be made this week in the Netherlands. Besides the fact that the infections of the virus will hopefully decrease sharply, this of course also gives good hope for the recovery of both the economy and its consumers. I think I speak for many when I say that I would like to quickly stimulate the economy again by consuming drinks on the terrace or perhaps a flight to an exotic destination.

Finally, I look forward to the lustrum that the ESV will celebrate in 2021. The lustrum that has been moved from 2020 to 2021 will be well celebrated this year. So let us toast to a good 2021 with a stunner of a lustrum!