Editorial August


On 27 July, the International Monetary Fund published a review of its global growth expectations.

Although they remain unchanged at 6% for 2021, there is a reality hidden behind this stability: the divergence between developed countries where growth is revised upwards (on the back of vaccination and fiscal support maintained or even accentuated), and emerging countries for which growth is being reduced for the same amount of 0.5% of GDP.

« This confirms once again the characteristics of this crisis. The global recession was triggered by administrative closures in response to the pandemic. The recovery is also created by unprecedented government, fiscal and monetary measures. »


But only developed countries can afford them. Indeed, their currencies are resistant to levels of budget deficits which would otherwise have collapsed their currencies.

Emerging countries lack strong (or at least independent) currencies or fiscal leeway and are having trouble dealing with the pandemic. And paradoxically, the rise in raw materials, this time, is not creating a virtuous circle that could bring them out of their slump. Copper, aluminium or zinc are close to their all-time highs, which is pushing China to sell part of its reserves to exert pressure on prices… with absolutely no results to date.

Is a two-speed recovery sustainable?

sine qua non condition lies in controlling this pandemic, even though further waves of contamination around the world are a major risk, particularly for emerging countries.

In the case of developed countries, the stimulus measures aim to fuel domestic growth based on infrastructure, investment and employment in the United States, the creation of champions across all strategic production chains in China and the race towards renewables in Europe.

The future will tell us which of these different strategies will have been the best choice. What is clear is that emerging countries are not part of the equation.

Written by

Director of the International Equities division

August 5, 2021

Covéa Finance, a portfolio management company of the MAAF, MMA and GMF groups with share capital of €24 901 254, incorporated as a single-person simplified joint stock company, registered with the Paris Trade and Companies Register under number 407 625 607 and approved by the French Financial Markets Authority under number GP 97 007.

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