What are the scenarios for the global economy?

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These are interesting times for ABN AMRO’s Chief Economist Sandra Phlippen and her team. The huge uncertainties around the pandemic put us in new territory when assessing the impact of the virus on the economy. In light of this, Group Economics has been working with scenarios since the start of the outbreak. The latest Global Monthly walks us through these scenarios.

Sandra Phlippen rips off the band-aid by starting with the negative scenario. “In this scenario we assume renewed lockdowns in the fourth quarter of 2020 and the first quarter of 2021. This leads again to global economic contraction, albeit a lot less severe than at the start of this year. This scenario again sees the global economy sink into a recession – that’s inevitable. We won’t see light at the end of the tunnel until 2022, when there is access to vaccines on a large scale. In the course of  2023 the economy will move back towards its normal growth path.”

The economy fares a good deal better in the base scenario, where the second wave is more moderate and renewed lockdowns aren’t necessary. “In this scenario the Dutch economy will shrink by no more than 5.2 percent this year, for example. Historically, this is still substantial. But next year will see 2.4 percent growth again,” says Sandra. All the major economies will see growth again in 2021.

As well as the coronavirus, both scenarios also take into account other economic uncertainties such as Brexit, trade tensions between the US and China, and the US presidential elections.

You can read the full vision on the global economy in Insights: 

What if there's a second lockdown and what if there isn't (Dutch only).


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