Covid-19: what will happen to the global economy? | The Economist
Economists expect that by the end of the year a recession may occur in the American and European economies, in China, slight growth is possible
The global economy is already in recession as the hit to economic activity from the coronavirus pandemic has already spread to many industries. This is the opinion of the majority of economists polled on Thursday by Reuters..
The COVID-19 pandemic has sent financial markets into a shock, the largest since the 2008 global financial crisis. This has already been announced by dozens of central banks in Europe, America, Asia and Australia..
Investors are in panic over stocks, bonds, gold and commodity prices, underlining expectations of serious economic damage from the coronavirus outbreak.
More than three quarters of economists (31 out of 41) from the Americas surveyed this week, when asked if the global economy is in recession, said that economic growth around the world has already ended..
“Last week, we concluded that the shock from the COVID-19 outbreak would trigger a global recession by cutting all global contracts in the three months from February to April,” said Bruce Kasman, head of global economic research at JP Morgan..
“There is no longer any doubt that the longest global economic growth in history will end this quarter. The key issue for the future now is to assess the depth and duration of the 2020 recession, ”added Kasman..
Economists have repeatedly cut their growth forecasts over the past month and raised forecasts for the likelihood of a recession in most of the world’s major economies..
The most pessimistic scenarios, which were discussed just a few weeks ago, have already become central to most of the economists who participated in the Reuters poll..
According to Ethan Harris, head of global economics at BofA, two of the three largest economies in the world – the US and the eurozone – will see negative growth, while the Chinese economy will “grow a paltry 1.5%.”.
“Our first post on the shock [to the economy] from the virus was called“ Bad or Worse ”; now we will change the title to “Really Bad or Much Worse”. We now expect COVID-19 to trigger a global recession in 2020 similar to the magnitude of the 1982 and 2009 recessions, ”says Harris..
The global economy is projected to grow 1.6% this year, about half of the 3.1% forecast in a January Reuters poll, and the weakest growth since the 2007-2009 global financial crisis. World GDP growth forecasts for 2020 vary -2.0% to + 2.7%.
“As cases of coronavirus increase in frequency, the destruction in the global economy will intensify. We have lowered our forecast for global GDP growth to 1.25% per year – less than in 1981-82 and 2008-09, but worse than during the 1991 and 2001 crises, ”researchers from Goldman Sachs note. “Accordingly, our economists expect recessions in Europe, Japan, Canada and possibly the United States.”.
The American economy will almost certainly enter a recession this year, if not already, according to a poll released Thursday following the emergency measures taken by the US Federal Reserve..
“The US economy is going to be shocked by this coronavirus, and I think there is still a lot of uncertainty about the size, depth and duration of the shock period,” says Tiffany Wilding, an economist at Pacific Investment Management Co. (PIMCO). – We are still thinking about it. We believe it is likely that the US will experience a slight technical downturn this year. “.