“Probably the worst is behind us, but the probability of a W-shaped recession is rising” – Global Markets

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Rising coronary heart disease rates in major economies such as the U.S., Brazil and India have highlighted the fragility of economic recovery and increased the risk of a “W-shaped” recovery, according to economists at research firm IHS Markit.

In a report on the global economy in July, Markit economists raised their global growth forecast for 2020 to a slight contraction of 5.5%, citing clear indications of a sharp decline in economic activity in May and June, when after a very deep and very short recession, their recovery is expected, With growth of about 4.4% in 2021.

“However, the logic underlying our ‘jump and decline’ forecast has not changed. Consumers and businesses have remained cautious,” said Markit economists. Governments and central banks around the world have flowed monetary and fiscal incentives at unprecedented levels since the crisis began. According to Markit economists, “unless the fiscal and monetary authorities provide additional incentives, key support for recovery will soon disappear.”

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Marquette predicts that the eurozone will be the region hardest hit economically, with a 8.6% drop in GDP this year. In this regard, it should be noted that European leaders gathered in Brussels today to begin several days of negotiations on a 750-krona aid fund. Billion euros.

However, an increase in the number of infections in the United States remains the main concern, with more than 77,000 new cases yesterday, according to data from Johns Hopkins University, the highest daily number of infections among any country in the world. In a number of countries, partial closures have had to be reactivated to prevent the virus from continuing to spread as the extent of the infection continues to climb.

Similar local restrictions have been introduced in a number of Corona outbreak centers around the world, including Australia, China, Germany, Israel, Japan and Spain. Market economists stressed that data on consumer spending patterns “reversed,” pointing to a renewed rise in consumer caution.

“The new wave of infections has reduced the probability of a V-shaped economic cycle, and increased the risk of a double-bottomed recession (W-shaped cycle),” said Markit economists.

Markit gives a 20% probability for such a scenario, but estimates that depending on the rate of infection, the likelihood may increase in the coming months.

“The likely timing of the second wave will be later this year or early 2021, and the economic contraction is likely to be much less severe relative to the recent severe recession,” the report said, citing improved management measures that would mean less likely closures.

“Bottom line: While the worst is probably behind us, the global recovery remains weak and faces additional risks,” the report concluded.

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  • 1.

    The worst of all behind us ???

    my son

    17/07/2020
    18:31

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    0

    Just the opposite

    closed



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