Q2 Global Forecast 2020 - The Economist

The Economist Intelligence Unit (EIU) expects that the global economy will contract by 2.5% in 2020 as a result of the coronavirus pandemic. This represents a much deeper global recession than that experienced during the global financial crisis.

The negative effect on growth will come via both demand and supply channels. Quarantine measures, illness, and negative consumer and business sentiment will suppress demand, with the closure of some factories and disruption to supply chains creating supply bottlenecks.

Some of the key questions discussed in our latest report include:

• What are the prospects for the global economy in the second half of 2020?
• How will China’s economy fare this year?
• Will Covid-19 lead to sovereign debt crises across developed and emerging markets?
• What will be the effect of the ongoing lockdowns on the euro zone’s output?
• What does the steep jump in unemployment claims tell us about the US economy?

The Economist Intelligence Unit provides world-leading political and economic analysis and forecasts for 197 countries. Our reports examine and explain the important political and economic trends and developments in each country, providing investors and businesses with key takeaways to understand the current situation and the likely future political and economic developments.

Alongside our comprehensive annual data, we provide quarterly forecasts for 50 countries covering 85% of global output. These forecasts, built using our proprietary econometric models, address the growing need for high-frequency data to help set budgets, investments and economic projections.

The EIU’s quarterly forecasts include up to 51 headline series for G20 countries, the BRICS grouping (comprising Brazil, Russia, India, China, and South Africa), as well as key emerging markets. These forecasts are updated continuously and projected out two years, or eight quarters. Our quarterly-frequency forecasts make use of a pioneering Global Vector Autoregression (GVAR) technique developed by leading econometricians over the past decade. Such models are believed to have strong forecasting properties, particularly in the short run, and to capture cross-quarter and cross-variable dynamics effectively.

Read full report on The Economist web-site