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July 17, 2020

How a persistent pandemic and prolonged lockdowns will slow economic recovery

By Paul Dennis

17 July

Macroeconomic influencers tracked by GlobalData share their views on Chinese Q2 gross domestic product (GDP), rising unemployment in Australia and the UK threatening recovery, and how Covid-19 remains to be the biggest risk to the global economy.

Stephen Tapp, Deputy Chief Economist and Trade Research Director at Export Development Canada (EDC) tweeted that a prolonged Covid-19 pandemic is the biggest among the top ten risks facing Canadian businesses in 2020.

US-China trade war, global protectionism, and increasing government and corporate debt are among other significant risks EDC has identified.

Covid-19 has inflated the majority of the other business risks facing Canada, adds EDC which suggests Canadian exporters be wary of default risks in emerging markets, especially those already reeling under massive debts.

In other news, lockdowns to fight the second wave of coronavirus infections will be detrimental to economic recovery, opines Ludovic Subran, Chief economist at insurance and asset management services provider Allianz.

Subran expects global gross domestic product (GDP) to fall by 4.7% during the year, but to grow by 4.8% in 2021.

Stimulus measures, both fiscal and monetary, announced so far exceed 1.3 times Chinese GDP, at $1.8t.

In its latest economic outlook, Allianz doesn’t expect global trade to return to pre-Covid levels before 2023 and anticipates the subdued capacity utilisation situation to persist until Q4 this year.

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