Atradius recently forecast a robust 6.5% global recovery in 2021.
The strength of a recovery depends on the development and administration of a vaccine or, alternatively, a state of the world in which the effect of social distancing on economic activities is largely overcome, the firm noted.
However, the recession facing the global economy this year is deeper than what occurred during the 2008/2009 financial crisis, the trade credit insurer observed, adding that there would be a 5.1% contraction in 2020 globally.
Despite the optimism about the growth in 2021, Atradius said the forecast of a robust V-shaped recovery next year is surrounded by high level of uncertainty.
Global trade to contract by 15%
In addition, trade growth, already ailing before the pandemic, has nose-dived owing to the supply and demand side pressures created by the virus, Atradius observed.
“In 2020, we expect global trade to shrink by about 15%,” the company predicted.
Advanced and emerging economies
As a group, advanced economies face a 6.5% GDP contraction in 2020, with a 5.9% recovery anticipated in 2021, Atradius said .
In the US, the negative effects of the trade war with China will be compounded by the negative effects the lockdown, said the firm, adding that the economic decline is having a huge impact on employment, with the unemployment rate shooting up to unprecedented levels.
In the Eurozone, the worst of the pandemic seems to be over, but the region is still heading for a historic recession in 2020 though sizable fiscal packages have been deployed to soften the blow, Atradius pointed out.
The pandemic is affecting many emerging market economies while all major emerging economies – except for China – will face a recession in 2020, the company said.
There are large differences between countries in regard to where they are on the infections curve, how effective policy measures are, and to the degree they are affected by lower commodity prices, Atradius added.
