Nomura revises 2020 outlook for global GDP to minus 4%
Nomura Global Economics, which has been downwardly revising its expectations for global economic growth amid the COVID-19 pandemic, now looks for the world’s gross domestic product to contract by 4% in 2020. As of Feb. 17, economists had been expecting 3.3% growth, but then trimmed that outlook three times as COVID-19 impact grew. “Our new base case assumes social distancing eases gradually after April and the unprecedented forces of central-bank and fiscal responses are quite successful in keeping companies afloat, although there is another, smaller, wave of infections in Q4,” Nomura said. “The result is a short, deep recession, with only moderate long-lasting damage to the economy.” The key will be the “race against time” to defeat the virus. In a better-than-base-case scenario, the virus is quickly beaten through strict compliance with social distancing, technological innovations and medical breakthroughs, Nomura said. “The result is still a short, deep recession, but it is followed by a sustained recovery.” In a worse scenario, “the virus beats us” as government-support policies do not last long enough to save companies and jobs.