Coronavirus Watch: Global growth will likely fall short
The ongoing strong tone of economic data confirms what we have long argued: A large chunk of the lockdown slump in activity will have been reversed in Q3, with further solid progress likely in Q4 2020.
Even so, most economies will still need a sustained period of well-above trend growth next year and beyond just to bring GDP back to its late-2019 peak. In a world were normality quickly returns, this may be achievable.
We have previously assumed that aiding next year’s recovery would be tangible medical progress towards overcoming the pandemic, but major developments on this front seem unlikely in the first half of 2021.
As a result, we increasingly think the underlying pace of growth in 2021 in our current forecast – which is on a par with that recorded after the Global Financial Crisis (GFC) – is probably, on balance, too optimistic. We will publish new forecasts on Tuesday, Sept 8.