Le Lézard
Classified in: Science and technology, Business, Covid-19 virus
Subjects: SVY, ECO

Atradius: Global Economy Bracing for Worst Recession in Almost 40 Years


Adjustments to lockdowns and vaccine development will determine length of recession

AMSTERDAM, July 1, 2020 /PRNewswire/ -- Apart from the devastating affect COVID-19 is having on people and their families, its impact on economies around the world is expected to result in the worst recession since 1980. What makes this recession so much more impactful is that it is affecting the entire world with almost every country expected to experience negative growth in 2020. As the recession is reverberating through supply chains, Atradius expects global trade to shrink 15% this year, which historically is a sharp drop. A robust economic recovery is still in the cards for 2021, however, the pace of the recovery remains very uncertain and depends on the lifting of lockdown measures. The economic cost of this recession will be high, given its impact on labour markets, business failures and the fiscal position of countries. Governments around the world are implementing sizable fiscal packages and loose monetary policy to try and take the sharp edges off this recession.

Atradius_Economic_Outlook_Advanced_Markets

Advanced economies are expected to feel the brunt of the recession with a cumulative drop in GDP of 6.6%. The United Kingdom, already burdened by its exit from the European Union, is looking at a 10.8% decline, while the Eurozone is not expected to fair much better, showing a drop in GDP of 8.0%. The United States and Japan are forecast to experience slightly less steep declines of 6.1% and 6.0% respectively.

Growth in emerging markets will also drop sharply, and the rapid increase in the spread of the coronavirus in a number of the larger emerging economies recently, means that forecasts could worsen in the coming months. China may be the only major economy able to avoid recession this year, however with only meagre growth expected, it could join the rest of the world in negative growth. Russia, which was hit by COVID-19 while in the middle of a price war with Saudi Arabia, is being severely impacted by the low oil price, its primary source of income, and lockdowns driving down demand for oil. The combination has lowered its GDP growth forecast to -6.2%. Brazil has reacted to COVID-19 very late and is now experiencing the fastest increase in infections of any country worldwide; economically it is not expected to do any better as GDP is forecast to decline 7.5%. Mexico, is experiencing a significant drop in demand from its main export partners in the US and Canada.

The baseline forecast assumes that either a vaccine will be developed or that world economies will adapt to the new norm of social distancing in an economically viable way. Under these assumptions, a return to GDP growth in 2021 is anticipated, but with the growth coming at a slower pace than the decline did. However, if neither of these two assumptions take place, the outlook will become less positive.

Andreas Tesch, Chief Market Officer of Atradius commented, "The lockdowns across the world, while necessary, have had a huge impact on the global economy. However, when effective and successful they will enable us to return to growth faster. During this unique period, detailed attention to credit management is essential to success."  

About Atradius

Atradius is a global provider of credit insurance, surety and collections services, with a strategic presence in over 50 countries. The credit insurance, bond and collection products offered by Atradius protect companies around the world against the default risks associated with selling goods and services on credit. Atradius is a member of Grupo Catalana Occidente (GCO.MC), one of the largest insurers in Spain and one of the largest credit insurers in the world. You can find more information online at https://group.atradius.com.

 

For further information:

Atradius Corporate Communications

Christine Gerryn

Tel.: +31-20-553-2047

E-mail: christine.gerryn@atradius.com  

www.atradius.com

 

Connect with Atradius on Social Media

Twitter

https://twitter.com/atradius

LinkedIn

https://linkedin.com/company/atradius

YouTube

https://www.youtube.com/user/atradiusgroup


Logo: https://mma.prnewswire.com/media/712156/Atradius_Logo.jpg
Photo: https://mma.prnewswire.com/media/1198947/Atradius_Economic_Outlook_Advanced_Markets.jpg
Photo: https://mma.prnewswire.com/media/1198948/Atradius_Economic_Outlook_Major_Emerging_Markets.jpg

Atradius_Economic_Outlook_Major_Emerging_Markets
Atradius_Logo

These press releases may also interest you

at 09:43
Only a few months after their official launch ? and well ahead of schedule due to high demand ? Kitzuma Cycling Logistics will begin offering national coverage on January 25th with its fully-built, ready-to-ride bike shipping service. After...

at 09:41
BetterWorld, the leading disruptor in the nonprofit fundraising space, has successfully helped raise $97,147 to support EF Pro Cycling, Cannondale and USA Cycling's recent campaign to establish cycling programs at Historically Black Colleges &...

at 09:33
Sinclair Broadcast Group ("Sinclair") is excited to announce that its original news program, "The National Desk," will premiere this Monday, January 18. The National Desk will air weekday mornings across the country and will be available on 68...

at 09:30
The Biometric Technology Market is Segmented by Type (Based on physical characteristics, Based on behavioral characteristics), by Application (Public sector, Banking & financial sector, Healthcare, IT & telecommunication), by Regions & Key players...

at 09:30
In the midst of a school year like no other, Hawaii families and educators are gearing up to safely spotlight education options during School Choice Week 2021. Hawaii families, schools, and organizations are hosting 79 virtual or at-home...

at 09:26
Artisan Talent is proud to announce the opening of their newest digital, marketing, creative staffing and recruiting office in Seattle, Washington. The new Seattle office is an expansion driven by customer feedback and market demands and is part of...



News published on 1 july 2020 at 05:00 and distributed by: