The coronavirus (COVID-19) pandemic has triggered the most severe global recession in nearly a century. Businesses are operating in a world of anxieties and uncertainties, not knowing what will be the new normal or when output and consumer spending will rebound to pre-crisis levels. In this context, Euromonitor has developed the Global Recovery Tracker and Recovery Index to help businesses track and predict when activity in key markets will recover so as to plan their strategy accordingly.
As the northern hemisphere approaches the winter, the number of cases has been rising again since mid-September – particularly in Europe and North America, with several European countries now heading into further lockdowns. In our baseline forecast, Euromonitor predicted global growth to be -4.8% in 2020, recovering to 5.2% in 2021. However, in the scenario of a major second global pandemic wave at the end of 2020, followed by a possible third wave in 2021, global real GDP growth will be much weaker at -5.3% in 2020 and 0.7% in 2021.
Having suffered the pandemic’s blow earlier than other countries and subsequently stemmed the spread of the virus, China is the first major economy to see its real economic output, labour market, and consumer spending rebound fully to pre-pandemic levels.
With a further wave of COVID-19 infections undermining efforts to return to normal, business and consumer confidence shaken and little scope for further fiscal and monetary stimulus, most countries and economies will still have a long way to recovery.
Unemployment is set to rise in many countries due to continued workplace closures and businesses facing the risks of renewed shutdowns and restrictions. Even in those countries where furloughs were implemented, the labour market is set to deteriorate as government support for workers and businesses fades.
In most countries, consumers are less inclined to spend, with many fearing job losses and expecting their personal finances to deteriorate in the coming months. Additionally, lockdown measures – with air travel suspended, restaurants and shops being shut – have restricted what consumers can spend money on.
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