The world economy is trying to regain what has been lost by Covid-19 in the past six months, but signs show that the recovery cannot be fast.
|Experts forecast that the world economy is difficult to accelerate when the instability due to Covid-19 has not ended.|
The world’s economic recession can take months if not a whole year to heal. The big problem of the global economy lies in the evolution of Covid-19 month by month, but not really quarterly. World economic activity outside of China declined dramatically in March and April. When the emancipation order was removed, many of the world’s major economies recovered from May and accelerated significantly during the month. 6 and July.
This development can be clearly seen in the UK. According to newly released data, the UK economy in July grew by 6.6% compared to June and increased by 8.7% compared to May. This momentum could bring the UK economy to a growth rate of 15%. in the third quarter, after a slump of 20.4% in the second quarter.
However, compared to February – the time before the sweeping Covid-19 translation, the British economy still declined by 11.7%. Services with direct customer contact in the UK also slipped 12.6% compared to February, while industrial output fell 7%.
The above figures reinforce the belief of many economists that the rebound as before the Covid-19 pandemic is very slow, especially in rich countries where Covid-19 has devastated everything. things from tourism, transportation to entertainment and the job market.
In the third quarter, the recovery of the UK economy and the global economy in general will be more modest as the disease continues to adversely affect businesses, workers and governments due to the official vaccine against Covid-19. is still unpredictable.
“As long as major economies don’t need a blockade, the global economy can maintain momentum recovery recovery, but it is difficult to recover as spectacularly as the opening session come back business operations a few months ago, “said Gilles Moëc, chief economist at Axa Insurance Company. However, this expert noted,” difficulties are now emerging “.
Analysts said that the UK economy could reach its pre-epidemic size by 2022, because Britain suffered the heaviest damage among major powers in the second quarter of 2020, while the economic recovery of Britain is similar to many other countries, including the US.
According to the US Federal Reserve (Fed) in Atlanta, the world’s largest economy is on track to grow 7% in the third quarter, after drifting down 9.1% in the second quarter. By the fourth quarter, the US economy could grow by 1.25% and reach the same scale as before in early 2022.
The world economy suffered the second consecutive quarter of recession in the second quarter due to the widespread blockade orders and the anti-epidemic social gap Covid-19 “knocked out” many industries. industry and services around the globe.
The economy of the G20 group – a group of powerful countries that account for more than 90% of the world economy – declined by 3.4% in the first quarter of 2020, the deepest decline since 1998. But, to the second quarter the decline it was even heavier and “unprecedented in the decades since the end of World War II.
In an internal blog post on September 11, chief economist of the European Central Bank (ECB) Philip Lane had a cautious assessment that the European economy recovered slowly and the inflation rate was still low. so there is still room to pump more stimulus packages in the coming months.
In addition, the survey results of IHS Markit Data Analysis Company showed that by the end of August, the world economic recovery has been maintained for 5 consecutive months. The IHS Markit survey – business performance “thermometer” in 45 countries based on purchasing managers’ feedback – hit its highest level in the past seven months.
However, with positive numbers, there are signs of instability surrounding the world economy. The recent recurrence of Covid-19 has caused people in Japan, India, Australia, Kazakhstan, Spain and Italy to tighten their consumption belts and become more cautious against the epidemic. Worryingly, these countries contribute up to 15% of global GDP.
Mr. Marcel Fratzscher, President of the German Institute for Economic Research said: “It would be a mistake to think that this economic recession will end quickly. We think that there may be big obstacles such as the wave of business bankruptcy and rising unemployment rate.” This means governments and central banks in countries still have much to do.
Meanwhile, James Pomeroy, an economist at HSBC believes that economies are likely to launch new economic stimulus packages, in addition to a few recently announced packages. “Without those stimulus, the ‘scar’ of this crisis will deepen and the gap between victory and defeat will widen,” James Pomeroy said.