A Short Note on Post-COVID Forecasting

A Short Note on Post-COVID Forecasting

Published on March 11, 2021 / Leer en español

Research Associate

There is no way to understate the profound impact that the COVID-19 pandemic has had on our individual and collective lives. It is no surprise, then, that governments, businesses, and households are anxious to overcome this situation. Consultants and researchers are rushing in to apply their analytical tools in order to forecast what the post-pandemic world is going to look like, given trends in the recent past and the present. Forecasting a few months into the future is important for short-term decision-making. But making highly consequential decisions for the medium- and long-term, given such high levels of uncertainty, may prove to be a fool’s errand. We are still in the middle of the pandemic, and trying to forecast years into the future, at this moment, is akin to forecasting post-disaster economic conditions while still being in the middle of the hurricane.

Governments and businesses are betting big on remote work becoming an increasingly permanent fixture among the working class, to the point that some suggest will change the structure of cities in the future. However, missing from this analysis is the fact that this has been an ongoing prediction for almost forty (40) years.

In Puerto Rico, long-term and enormously consequential decisions are being made right this moment based on forecasts that show a small uptick in the island’s economy in the future. The problem, of course, is that there are a lot of variables that are somewhat beyond local control that result in a high degree of uncertainty, which could easily derail even the most reasonably performed forecast. For example, in order to build the path towards economic recovery, having a successful vaccine rollout is key. Having a clear picture of how and when this will happen is beyond the analysis parameters of any forecaster, as the recent delay in vaccine delivery due to the Texas snowstorm has shown. Also, it is still unclear how small businesses and the labor force will come out of this and what they will look like in the future. As of February of this year, the US Census Pulse Survey for small businesses showed that almost 75% of small businesses in Puerto Rico reported still being negatively affected by the pandemic.

We are still in the emergency phase of this disaster and without a clear route of when and how the post-pandemic reconstruction will take place. Of course, CNE has long supported steering economic development through vision and long-term strategic thinking. But fog-gazing the future in the middle of a historic crisis is a very different exercise.