The world economy has clawed back about 60% of the output lost in the first half of the year, but recoveries in most parts of the world have already slowed. Prospects now vary according to success in controlling the virus and the policy response. The outlook for Europe has darkened as second waves have prompted new restrictions and fiscal support is being scaled back. But the US looks more resilient, with risks in both directions relating to the virus and to the possibility of a post-election fiscal stimulus. China will continue to be the key outperformer, although its recovery is doing little to boost growth elsewhere in the world. Meanwhile, inflation will stay very low just about everywhere, implying that the era of unprecedented monetary policy support is set to continue for at least the next couple of years.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services