The latest data suggest a sharp bounce back in activity in the global economy. The latest round of forecasts are for this strong recovery to persist through the near term. But is the news as good as it seems?

In their latest outlook published last month, the Bank of England pointed to the successful vaccine rollout, ongoing fiscal support, and household spending being boosted by savings built up during the pandemic, as reasons why they expect the UK economy to grow this year at its fastest rate since 1945. Activity is on track to return to pre-pandemic levels by early 2022.

As a reference point, it took the economy five years to recover to pre-recession levels after the 2008 financial crisis. Unemployment, which at one point was expected to rise to close to 10%, is now predicted to peak at just 6%, not too dissimilar to the UK’s average unemployment rate over the last 50 years.

All of this in the aftermath of the sharpest fall in economic activity in over 300 years.

A similar picture is emerging at the global level. The IMF have revised up their forecasts for world growth in 2021, with particularly strong growth in the US, Europe and China. But as with many economic statistics, the headline number hides huge variations and subtleties.

Here in Scotland, levels of activity remain well below trend in key parts of our economy, from hospitality through to culture and the arts. We’ve also seen a much slower pace of restrictions easing in Glasgow, with knock-on effects to the restarting of its economy.

There is also continued displacement of activity within sectors, most notably in retail with the shift online leading to widespread shop closures across city and town centres. The prospects for a k-shaped recovery – where some sectors grow strongly whilst others struggle – remain high.

There is significant variation in outcomes for individuals and households too. Whilst aggregate unemployment rates have remained low, the youth unemployment rate now stands at around 13%. And whilst average savings rates have increased, for many households levels of indebtedness have soared to their highest level since the financial crisis.

Across the global economy the pace of recovery is also going to be uneven. The UK’s relatively more positive outlook contrasts with that for many in the global south. As a result of huge inequalities in vaccination rates – with securing adequate supplies a key challenge – many countries are facing renewed waves of the virus. The ability of governments and businesses in many low and middle-income countries to finance their economies through renewed lockdowns is a key concern. Greater international cooperation, both to secure effective rollouts of vaccines and to offer financial support, is needed.

So, whilst growth is returning, it is returning in a very uneven pattern.

Added to this, we still know little about the long-term effects of Covid-19 on our economy. How permanent and prevalent will the shift to home working be? Will there be long-term hysteresis effects with so many workers furloughed? Will the overhang of debt act as a brake on growth? Or will we emerge from this crisis more flexible and innovative?

Health professionals have described the risks of long-Covid where the effects of the virus continue long after the initial illness. For many businesses and households, a similar phenomenon will cast a shadow over their prosperity for some time yet.

All of this points to a hugely uneven economic recovery both here in Scotland and across the wider global economy. Whilst the recent news on the gathering pace of the recovery is extremely welcome, the effects of this economic crisis will continue to resonate for a long time to come.

Graeme Roy is professor of economics at the University of Glasgow’s Adam Smith Business School