From a massive shock to a differentiated recovery
A few weeks after the first containment easing measures, economic activity seems to be picking up in most European countries. However, about two months after China, this gradual and partial recovery will not erase the effects of containment on growth: the depth of the recession in 2020 (a 4.4% drop in world GDP according to Coface) will be stronger than in 2009. Despite the expected recovery in 2021 (+5.1%) - in the absence of a second wave of the pandemic - GDP would remain 2 to 5 points lower in the United States, the Eurozone, Japan and the United Kingdom compared to 2019 levels. The expected increase in household precautionary savings and cancellation of business investment because of persistent uncertainty about the evolution of the pandemic, as well as the irrecoverable nature of production losses in some sectors (particularly service activities and raw materials used as combustible) explain the lack of a rapid catch-up effect. Admittedly, measures taken by central banks have helped to stabilize fi nancial markets since April, especially those of countries (especially in Western Europe) that have, so far, contributed in maintaining some companies’ production capacities, mainly by increasing debt. Nevertheless, they are also postponing adjustments in employment and corporate cash fl ow issues.
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