Covid-19 has been a devastating global shock. But the news on vaccines is really encouraging. The economic impact has also not been quite as bad as feared about half a year ago. Moreover, a sane and decent man is soon going to take over as president of the US. Just maybe, the world will emerge from the nightmare sooner and in better shape than many feared.

The latest Economic Outlook from the OECD is less gloomy about the immediate economic impact of Covid-19 than it was in June. At that time, the Paris-based international organisation was so uncertain that it provided not one forecast but two, neither of which was preferred. The more optimistic one assumed a “single hit” from coronavirus; the more pessimistic one a double hit. In the event, large parts of the world, notably the US and western Europe, experienced such a double hit. Yet the economic outcomes this year are now expected to be better than had been feared in the case of a single-hit pandemic. (See charts.)

This is not to downplay the severity of the impact. Global gross domestic product is still forecast to shrink by 4.2 per cent this year, while the GDP of OECD members is forecast to shrink by 5.5 per cent. This recession will be the worst since the Depression. The OECD warns that “the median advanced and emerging-market economy could have lost the equivalent of four to five years of per capita real income growth by 2022”.