The chief executive of Barclays (BARC.L) has said the world could see a “roaring 20s” of economic growth once the pandemic is brought under control.
“You could have quite a robust second half of this year,” Jes Staley said at an event on Tuesday.
Staley referenced the so-called “roaring 20s” that came after the Spanish flu of 1918 — years of robust expansion that followed the deadly pandemic.
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The Barclays chief executive said a similar expansion could be fuelled by the large amount of savings built up by some businesses and households during the COVID-19 crisis. The household savings ratio in the UK increased by the most on record between the first and second quarter of 2020, while many large US businesses hoarded cash in the early stages of the pandemic.
“When you look at the balance sheet of a JP Morgan or a Barclays, there’s just an enormous stored up purchasing power,” Staley said.
While some households and businesses have managed to accumulate large amounts of dry powder that could be spent when economies unlock, not everyone has faired so well. Corporate debt and unemployment levels have soared around the world over the last year, reflecting the struggles of hard hit sectors such as hospitality and aviation.
Staley said the pandemic was “very unequal in how… it’s hitting parts of the economy.” The biggest challenge was be to ensure “those that are being left behind for all sorts of structural reasons” are not passed over during the recovery, he said. Without targeted action, COVID-19 risks exacerbating existing inequalities.
Staley was cautious about predicting when exactly an economic rebound could take root, saying new variants of the virus and the effectiveness of vaccines were “big uncertainties that seem to be growing by the day.”
His comments came during a panel at the virtual Davos Agenda conference for world leaders.
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