The lockdown risk we warned about in November was unfortunately realised in December and January, globally and also domestically. Global economic restrictions have caused renewed disruptions to production and trade activity. Combined with domestic restrictions to the tourism, restaurant, entertainment, and alcohol sectors, foreign restrictions have caused the domestic recovery from H2 2020 to stall into early 2021.
To be clear, economic activity has improved considerably since Q2 2020 when the hard lockdown put over 2 million people out of work. Moreover, the easing of restrictions in early February 2021 and moving to the end of the northern hemisphere winter should begin to support improvements in business conditions once again.
However, much economic damage and disruption has occurred in the past year, and adjusting to this reality will entail lasting economic hardship, resource reallocation, and repairing of savings.
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