Plot twist: there’s no global recession.

While pundits warned of the impending global recession this time last year, that’s not been the case at all, as financial markets have continually been surprised by the strength of economic rebounds, with market data consistently better than expected.

That’s simply because there was no recession. Rather, there was a sudden slowdown in GDP when economies were shut down, but they picked up again, at pace, as soon as they were reopened, with economies recovering at different times.

This pattern of growth is proof that the virus is not powerful enough to matter, economically speaking. What matters is fear of the virus, and how that impacts consumer behaviour – and policy behaviour. And it’s the different levels of fear that have influenced how economies have behaved.

For example, the US fears the virus less than the UK and Europe. This has meant that US consumer patterns haven’t changed much, and the US has had a strong first quarter of this year with strong consumer spending and a likely fall in savings. In contrast, consumers in the UK and Europe have only been able to spend on essential goods, delaying their consumption – but as lockdown conditions ease and the vaccine rolls out, consumers in these markets will have an extra quarter’s savings on hand.

Here’s where one of the key shifts will happen, though: in the short term, people are still going to be less able to spend money on services, like travel and hospitality. They’ll be spending on goods, shopping in low-risk environments, either in online, or in much smaller more carefully controlled showrooms, which in turn will have an impact on the retail property sector.

However, once economies open up, there will be more of a shift to spending on services, and this is likely to sustain economic recovery in the second half of the year, which will in turn lead to improvements in the labour market.

Another major shift, in this globalised world, is one towards localisation, sped up by office-based workers being compelled to work from home. This has impacted city economies as demand for commercial office spaces falls as businesses either move entirely to work-from-home models, or significantly reduce their office space to smaller hot desking environments, reducing rental costs and placing the burden of office setups onto workers.

This has a negative knock-on effect for support services around those offices, whose clientele has moved home – but it’s been a boon for businesses in the suburbs, to whom home-working execs turn for meals and other convenience services.

This has supported another surprise emerging from the last year: we’ve seen a 40% growth in new business creation, and despite what broader trends say, many of these businesses are in the services sector. Reasons for this are two-fold. Firstly, working from home means that people have suddenly had a good few extra hours on hand each day, because they’re not commuting to the office, and they’re using that spare time to earn more money or follow a passion project. Others – many in services – have simply been compelled to find a new income source, and have used their human resilience and ingenuity to forge a new path for themselves.

Against these backgrounds, it is unlikely that central banks will even hint at changing policy interest rates for the time being, however, it is likely that the bond buying programme will come under discussion in the second half of the year. However, as liquidity paves the way to recovery, central banks will scale back on that buying. When it comes to financial markets, it’s still an environment where central banks are encouraging investors to take risks, with continued growth likely.

When it comes to emerging markets like South Africa, the global low interest rate is going to support recovery. However, countries that have a high dependence on tourism, like South Africa, are likely to struggle until the vaccine is fully rolled out. Emerging markets are also likely to be impacted more by rising food inflation, as producers and consumers are much closer in the value chain than they would be in more developed markets.