Today, there are more than 2.25 million people in the world's epidemic, and more than 80,000 people were added yesterday, with more than 150,000 deaths. Recently, the International Monetary Fund (imf) and the World Bank held an online spring meeting. Discuss how to deal with the global economic trend under the epidemic. It is expected that the global economy will shrink by 3% this year, which is the worst economic recession since the Great Depression in the 1930s.
Analysts believe that due to the impact of the new coronary pneumonia epidemic, the global economy has entered a recession has become a consensus. But how deep the recession is, how long it lasts, and when it can recover, because of the uncertainty of the epidemic itself, there is no final answer.
"Great Depression" recession?
The epidemic is changing the format of the spring annual meeting of imf and the World Bank, and is also reshaping the topic of this spring meeting. At present, where will this epidemic that has infected more than 2.25 million people worldwide and caused the death of more than 150,000 people take the global economy? The world wants to hear the "authority" of the world's two major financial institutions.
On April 9th, imf president Georgieva gave a pessimistic prediction during the opening speech for imf and the World Bank remote spring meeting. She said that due to the new crown epidemic, the global economy will fall sharply into negative growth in 2020. Among imf180 member countries, 170 countries' per capita income will fall.
imf released the latest "World Economic Outlook Report" on the 14th. It is expected that the global economy will shrink by 3% this year, which is the worst economic recession since the Great Depression in the 1930s. In January this year, when the outbreak had not yet occurred, imf predicted that with the easing of Sino-US trade tensions, the global economy would grow by 3.3% this year, and by 2021 it would grow by 3.4%.
In fact, it is not the imf family that lowers growth expectations and looks down on economic prospects. The International Finance Association lowered its global economic growth forecast three times within a month. The latest forecast of global GDP will drop by 2.8% this year, which is greater than the 2.1% drop in 2009 during the global financial crisis. The United Nations Conference on Trade and Development predicts that some countries and regions will In the event of an economic recession, global foreign direct investment may reach its lowest point since the 2008 international financial crisis ...
"The economic recession has begun, the only difference is how deep and painful the recession will eventually be," the New York Times wrote in an April 13 report. Like imf, some economists and officials have compared the recession caused by the epidemic with the Great Depression of the 1930s.
James Brad, chairman of the US Federal Reserve Bank of St. Louis, believes that it is already a high probability that the United States and other developed countries will fall into a depression like the 1930s.
Lian Ping, chief economist and dean of the Institute of Zhixin Investment, believes that the world economy has fallen into recession and the outside world has no objections. Because the epidemic has caused a sharp contraction in demand, for the global economy, especially the economies of developed countries, consumption has contributed the most to gdp. If consumer demand shrinks sharply, the economy will not be able to bear, and recession is inevitable.
"This recession will exceed the global financial crisis of 2008-2009, but it is difficult to say that it has reached such a deep crisis as the Great Depression." Lian Ping said that the Great Depression severely damaged the supply system and production capacity, and is now affected by the epidemic and the country's anti-epidemic As a result of policy, production activities cannot be carried out, and consumer demand is suppressed, but production capacity is still there. As long as the epidemic situation is alleviated and controlled, demand will pick up and production capacity will be released. At that time, PCB factories may improve.
"The degree of this global economic recession may be unprecedented, but it is also different from the Great Depression." Zhang Jun, Dean of the School of Economics of Fudan University and Director of the China Economic Research Center, said that there was no globalization during the Great Depression, and the impact was limited to the United States. Europe and other established industrialized countries, Asia and Africa account for a negligible share of the global economy. But now is the era of globalization, the global economy is highly linked, and the "closing the city" measures are tantamount to cutting off the supply chain and shutting down production. This has a great impact on the global economy and will cause a "cliff-like recession" in the economy. However, although the impact is strong, the duration may not be very long, and it will not take more than ten years after the depression to recover.
Ding Yifan, a researcher at the World Development Institute of the Development Research Center of the State Council, pointed out that the epidemic will bring the world economy into a deep recession. For the developed economies of the United States and Europe, the impact is comprehensive. First of all, it hits the service industry with the largest proportion of GDP, and then spreads to the manufacturing industry. The financial industry panic is expected to reappear.
For emerging economies, they may fall into the dilemma of "no market and no funds". In terms of markets, emerging economies rely on the final consumer market of developed countries, but now consumption in developed countries has shrunk and emerging economies have lost external markets; in terms of funding, emerging economies will face capital supply problems. Originally, capital flows from developed countries to emerging economies to promote their economic growth, now there is capital outflows, and emerging economies may "bleed".
According to Georgieva, president of imf, about $ 100 billion in investment has fled emerging markets-more than three times the amount of capital flight during the 2008 global financial crisis.
Myths about recovery
It is worth noting that although the global epidemic figures are refreshing every day, thanks to the anti-epidemic measures adopted by various countries, some positive momentum has recently emerged. Italy and Spain, the countries hardest hit by the global epidemic, are showing signs of slowing down. The US epidemic was "epicentered" and Governor of New York State Como said on the 13th that "the worst time is over." Some countries have gradually started or are planning to relax restrictive measures and carefully "walk the tightrope" between prevention and resumption.
These signs seem to leave room for imagination of the economic recovery that may be ushered in after the victory of the epidemic.
Unfortunately, economists have basically reached consensus on the epidemic dragging the world economy into recession, but there are still differences on the prospects for recovery.
Georgieva warned that even if the epidemic is brought under control later this year, the blockade measures will be lifted, but because the income of most countries will decline, the global economy may only see a "partial recovery" next year, and the situation cannot be ruled out The possibility of deterioration. "The depth and duration of this crisis still face great uncertainty."
However, some unofficial economists believe that the impact of the epidemic is more similar to a natural disaster like a hurricane than a traditional financial or economic crisis. Once people can resume work, the economy will rebound strongly. The circuit board factory will reshuffle during the outbreak.