Reuters polls of economists from around the world has found that they forecast the global economy will suffer its steepest contraction on record this year followed by a long U-shaped recovery.
Surveys of more than 500 economists conducted over the past few weeks found that most major economies were in the midst of a severe economic downturn due to the COVID-19 pandemic and their recoveries were predicted to be U-shaped. More than 55% of the economists surveyed said the global economic recovery would be U-shaped. Less than half of the economists forecast a V-shaped recovery for the global economy.
Many countries are under lockdowns to curb the spread of COVID-19, which has infected more than 2.6 million people worldwide and caused 180,000 deaths. In several Reuters polls over the past two months, economists – who are generally more upbeat about the economic environment – have turned extremely cautious, with an increasing number of them slashing their already bleak forecasts for developed and emerging economies alike.
Gross Domestic Product (GDP) forecasts for all 42 economies polled by Reuters this month were downgraded for 2020 and expectations for next year were modest at best. That suggests the fiscal and monetary support from governments and central banks around the world will at best soften the blow from the pandemic.
But nearly 90% of economists said the risks to their forecasts for the second half of 2020 were skewed more to the downside, suggesting the outlook is likely to be downgraded again if the pandemic worsens.