‘Pre-COVID life won’t be back in 2021’, says Deutsche Bank’s CIO⁠ — he also says Asia will continue to rise

‘Pre-COVID life won’t be back in 2021’, says Deutsche Bank’s CIO⁠ — he also says Asia will continue to rise
<p>Deutsche Bank<br></p>Björn Laczay / Wikimedia
  • Deutsche Bank’s chief investment officer Christian Nolting has noted some of the major issues that individuals, businesses and governments will have to face in 2021 and beyond.
  • While many of us have been wishing for a return of life to the pre-COVID era, Nolting states that it will not happen.
  • The way forward, he says, is by adopting a strategic, long-term approach instead of reactionary measures.
The COVID pandemic has had a massive impact on everyone’s lives this year. Most of us have been wishing for a speedy return to the pre-COVID lifestyle. But that will not happen, according to Deutsche Bank’s global chief investment officer Christian Nolting.

According to Nolting, COVID has had a long-term impact on everyone, from individuals to businesses as well as governments. Instead of a reactionary approach, Nolting says that these changes require a strategic, long-term approach.

“If you see this not just as a short-term recovery issue, but also as a response to structural changes around economic and investment relationships – the “tectonic plates” on our cover – an investment response needs to be not just tactical, but also strategic,” Nolting said in Deutsche Bank’s annual outlook report for 2021.

The report identifies how the post-COVID world will have an impact on individuals, business, political and global world order.

Impact 1: No return to the pre-COVID life

Coronavirus lockdowns around the world have forced workers to work from home, leading to widespread digitization of workflows wherever possible. However, essential works and those without digital access have had to go out and work.

This has undone the gains made to reduce inequality across economies. Factors like unemployment support, healthcare provisions and digitalization have increased the role of the state.

Impact 2: Businesses must continue the process of reinvention

The pandemic has amplified the role of technology in the modern economy. From digital economy to communications, ecommerce and delivery services, and healthcare, technology has been adopted across sectors to bring businesses back online.

The increased focus on technology has necessitated the need for continued focus on cybersecurity as well as bringing advanced tech like artificial intelligence in the mainstream.

Impact 3: Governments must contain the long-term effects too

Governments across the world will have to figure out the best monetary policies to deal with the issues thrown up by divergence, demographics, debt, and digitalization.

“Escalating fiscal deficits have exacerbated an existing trend for debt levels to increase. Markets currently don't appear that concerned about such borrowing – but don't take this relaxed approach for granted,” Nolting added.

Impact 4: The new world order

Many Asian economies have beaten the coronavirus blues to register growth at a time when many developed countries have reported contractions. While this has not immediately thrown up a new world leader, the rise of Asia continues.

The report notes that developed markets – especially in the Eurozone – have a lot to prove in 2021. It adds that the US economy’s flexible nature will support its recovery, but the Eurozone’s outlook “appears to be problematic”.


3 trend reversals that will define the market in early 2021, according to a stock chief at the world's largest asset manager

A hedge fund chief who oversees $2 billion breaks down why we’re in for a 61% stock-market crash over the next 18-24 months — and shares 3 types of companies he’s shorting right now

Warren Buffett advised graduates to read, learn to express themselves, and find a job they love in a virtual address on Saturday. Here are the 11 best quotes.