The vaccine will not save the world economy and do not count on it.
Policymakers hoped for a V-shaped recovery in the early months of the coronavirus crisis. Furthermore, they hoped that the pandemic could be suppressed or knocked down, and economic activity would bounce back quickly.
Today countries across the world face a new surge in infections and contemplate the possibility of recent probably localized lockdowns. Thus, many economists forecast things to get worse before they get better.
Albert bearish is the notoriously bearish strategist at the investment bank division of Societe Generale. He became famous with a forecast of the 2008 global financial crisis. Thus, Edwards said that it would certainly feel like a depression.
Countries have come blinking out of lockdown. Thus, the global economy may have kinked up. There is a swift solution to the pandemic, the widespread deployment of a successful vaccine is months, if not years, away. The Coronavirus will, unfortunately, be a drag on economies because businesses shut their doors, banks are facing rising levels of bad loans, and workers lose their jobs.
Gross domestic product (GDP) in the eurozone will plunge sharply in 2020. Moreover, it will only crawl back slowly in 2021. It is according to forecasts by the International Monetary Fund, J.P. Morgan, and Moody.
Edwards said that the recovery would peter out. It will be the case even if they do not tip into another outright recession because of unemployment.
The economy under the Coronavirus
In the first six months of the year, GDP (gross domestic product) has fallen by 15.6 percent. According to the United States investment bank JPMorgan Chase it was a drop four times greater in 2008. Some of that decline has already bee recovered. Nevertheless, the International Monetary Fund forecasts that the world economy will contract by 4.9 percent during the whole of 2020. It will happen even as governments start to draw down support programs. Gross domestic product in the United Kingdom and the eurozone will most probably decline by 10.2 percent in 2020. Meanwhile, the United States economy shrinks by eight percent.
State-mandated lockdowns precipitated the first stage of the coronavirus crisis. The coming months will be most likely characterized by government restrictions like retail, hospitality, entertainment, tourism, and travel, and consumer fear.
Most experts, including those at the European Central bank and the Bank of England, do not forecast global output to recover to its pre-crisis levels until the end of 2021.
On Wednesday, European Union market regulators said that investors are underestimating the risk of economic disappointment. The European Securities and Markets Authority said that prices seem to have come untethered from economic reality.
The agency noted that since their coronavirus dive in March, the European stocks had soared more than forty percent. Nevertheless, some forecasts say that the economy of the Continent might not fully recover until 2023.
A good example is an airport deli. It is an illustration of how a drop in demand in one area affects other areas globally.
Airport traffic slows as wary travelers cancel their holidays.