Activity improves in short term, but rise in inflation accelerates end of monetary stimulus

Vaccination continues to be the main lever of the global economic recovery and its strength has been confirmed in the latest indicators. In all, just over a fifth of the global population has received at least one COVID-19 vaccine dose. Developed countries stand out in this process, due to the rapid advance of vaccination, which has allowed them to open up their economies again without losing control over the virus.

The recovery process began in China, where the epidemic was brought under control almost as soon as it broke out. Then came the United Kingdom, Israel, the United States and some countries in the Middle East. Eu- ropean countries, after a very slow start, have also been able to accelerate their vaccination programs, and more recently this process has also sped up in emerging countries. The global availability of vaccines is increasing and most of the new doses produced will be distributed to developing countries.

International experience suggests that in Brazil, the third quarter is likely to be marked by a significant advan- ce in vaccination, with positive consequences for the pace and profile of the economic recovery. However, this projection is not without risks: there is some uncertainty about the ability to adequately control the pandemic, despite the advance of vaccination. This is because we are using a different mix of vaccines than in the aforemen- tioned countries, especially the advanced ones. The Chilean case illustrates this risk well. There, even though a significant portion of the population is vaccinated, the numbers of cases and deaths remain high, imposing the need for new measures to restrict mobility and economic activity.

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