BENGALURU- There is a high risk the resurgence in coronavirus cases halts the global economic recovery by year-end, according to Reuters polls of around 500 economists, a majority of whom expected the rebound next year to be weaker than previously thought.
Governments and central banks around the world have pledged trillions of dollars of stimulus, helping most economies out of deep recessions. But a second wave of infections in places that eased lockdowns is now underway, leading to more restrictions.
That was a top risk repeatedly highlighted by Reuters surveys of economists, FX analysts, bond and equity strategists, as well as global fund managers since the start of the pandemic.
The Oct. 6-27 Reuters polls of economists across Asia, Europe and the Americas covering 46 economies showed scant sign of activity recovering to pre-COVID- 19 levels anytime soon.
Nearly three-quarters of 150 analysts who responded to an additional question said the resurgence in coronavirus cases posed a high risk of halting the current global economic recovery as early as this year.
“Even before the renewed lockdowns there was already a broad acceptance that many countries will see a permanently lower level of GDP than they would have done in the absence of the pandemic,” noted Janet Henry, global chief economist at HSBC.
“Higher unemployment and higher debt appear inevitable but there are also implications for equality, long-term growth potential and financial stability.”
Median growth forecasts for over 65 percent of those 46 economies were downgraded or left unchanged for 2020 and nearly 60 percent of those for 2021. The range of forecasts also reveals mostly lower lows and lower highs.
In the meantime, there is no sign of the pandemic letting up anytime soon. The United States, Russia, France and many other countries have registered record numbers of cases in recent days, and European governments introduced new curbs.
The global economy was expected to grow 5.3 percent next year after shrinking 4.0 percent this year, a touch higher than the International Monetary Fund’s projection of 5.2 percent for 2021.