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Steep contraction in Q2, but signs of revival from May

Available data suggest that world GDP will fall by around 8% q/q in Q2. While China has seen some recovery, GDP in southern Europe probably fell by as much as 25% on the quarter and India appears to have seen a similar drop. Thankfully, high-frequency global indicators such as driver route requests, visits to workplaces and recreational establishments, as well as national indicators including electricity consumption all point to a recovery from May. But in most economies, activity is still far below pre-virus levels, and beyond a brief bounce in activity as some businesses reopen, recoveries will probably be slow-going. Indeed, most Chinese households came out of lockdown months ago, and yet many remain cautious about travelling or heading out to the shops at the weekend.

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