Prospects for the World Economy

Publication date: 28 Jul 2020 | Publication type: National Institute Economic Review | Theme: Macroeconomics | NIESR Author(s): Naisbitt, B; Boshoff, J; Holland, D; Hurst, I; Kara, A; Macchiarelli, C; Mao, X; Sánchez Juanino, P; Thamotheram, C; Whyte, K | Publisher: Cambridge University Press
  • The Covid-19 pandemic and the effects of the measures taken to protect lives continue to dominate the short-term global economic outlook.
  • In still highly uncertain times, there are widespread falls in GDP as lockdowns pause many forms of economic activity.  Some countries are now starting to unlock, permitting a wider range of economic activities to be undertaken and allowing increased mobility. The effects of unlocking are uncertain, especially with the number of people infected still rising.
  • We project that global GDP will fall by 5 per cent this year, a substantially larger fall than during the financial crisis, taking global GDP back to 2018 levels, with unemployment rising as a consequence. 
  • Once economic activity re-establishes after lockdowns are lifted, the increase in output could result in substantial yearon-year increases in GDP next year. We project an increase of 6¼ per cent in global GDP.  Even with such an increase, however, the level of GDP at the end of 2021 will be lower than had the pandemic not occurred.

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