The economic prospects for peace this year again declined last month when the coronavirus pandemic spread from Asia to America, with the sharp V-shaped recovery expected by most economists surveyed.
As many countries begin to ease the blocking restrictions imposed to stop the spread of the virus, which infected more than 5.5 million people worldwide, the stock markets come together in the hope of an early recovery of health and prosperity.
But the dip in economic activity will be deeper, and recovery will probably take longer than recently predicted, in part because the pandemic is spreading around the world in stages and arriving in countries at different times.
Surveys by over 250 economists over the past few weeks have shown that the recession in most large economies this year will be deeper than previously thought.
“In many ways, the prospects for the global economy resemble an obstacle course. At the first stage, the economy falls into a big hole that started in China in the first quarter, most of the rest of the world in the second quarter and continues until the third quarter in some emerging markets, ”said Ethan Harris, head of global economic research at BofA.
“The second step is to try to open an economy without re-inflating the disease. The third step is related to the belated influence of trust on expenditures on durable goods, the risks of premature termination of fiscal and foreign exchange stimulation, and a trade and technical war awaiting its time. ”
Nearly three-quarters of economists, 69 out of 94 who answered an additional question, said recovery would be either U-shaped, with a long depression, or as a mark where the recovery rate is not as high as the drop.
Only 15 respondents predicted a strong V-shaped recovery. Others said it would be a W-shape, where a strong rebound would lead to another sharp decline, or L-shape.
According to forecasts, this year the world economy will shrink by 3.2% compared with the 2.0% decline predicted in the April 23 poll, and -1.2% in the April 3 poll.
No economist predicted expected growth in 2020 with forecasts ranging from -0.3% to -6.7%. The worst-case scenario forecast was -6.0%, ranging from -3.0% to -15.0%.