Despite seeing major market swings following the 2016 Brexit referendum, we don’t expect Britain’s departure from the European Union (EU) to have any major economic effects in our baseline outlook for 2021 and beyond. Far more important are COVID-19, fiscal policy, and bigger questions around future productivity growth.

A confluence of dynamics are set to accelerate global capital flows to emerging markets amid attractive valuations.

Global output and demand are likely to rebound strongly in 2021, but we see risks that call for careful portfolio positioning.

With a narrowly Democratic Congress, U.S. fiscal spending is likely to increase on economic relief from the pandemic, infrastructure, and healthcare, boosting the economic rebound.