My subscription
...
Filters
My Subscription All Publications

How to think about the long-term effects of the virus

The immediate effects of the coronavirus on the global economy are becoming increasingly clear and point to a sharp fall in output across the world. Recession looms. The effects over the longer term are less obvious. The most likely outcome is that economies return to the pre-virus path of GDP within a couple of years, albeit with some lost output in the meantime. But that hinges on several things going right over the coming months and quarters.
Neil Shearing Group Chief Economist
Continue reading

More from Global Economics

Global Economics Update

Equity price falls add to headwinds to growth

Recent falls in equity prices have not prompted downgrades to our global growth forecasts since the passthrough to the real economy is limited and part of the bad news has already been factored in to consumer confidence. But the correction will contribute to a tightening of financial conditions which is another reason to believe that growth in major economies will be weaker than consensus forecasts imply.

25 May 2022

Global Economics Update

PMIs: Orders slowing and price pressures still acute

The flash PMIs for May suggest that activity slowed in most DMs compared to April, and weaker growth in new orders points to a further slowdown to come. There were some positive developments on the supply front, given further evidence that shortages eased somewhat. However, firms’ costs rose at their fastest rate on record, suggesting that price pressures will continue to weigh on economic activity.

24 May 2022

Global Economics Update

Can we trust the PMIs after their undue optimism in Q1?

The PMI surveys gave an overly optimistic steer of GDP growth in advanced economies in Q1. This partly reflected volatility in imports and inventories and the effects of COVID restrictions, all of which should fade from now on allowing the PMIs to give a more accurate steer. But since the headline PMIs do not cover the retail sector, they might continue to overstate actual GDP growth to some extent.

23 May 2022

More from Neil Shearing

Long Run Update

Scar free? The implications of a full economic recovery

While the consensus has become more optimistic about the near-term recovery, most analysts – and the majority of central banks – still believe that the pandemic will leave a legacy of lower global output over the long term. We disagree. And if we’re right, there will be profound consequences for everything from the future path of GDP to the outlook for inflation and the public finances.

21 May 2021

Global Economics Update

Four questions (answers) on r/Wallstreetbets

The volatility caused by retail investors co-ordinated on the r/Wallstreetbets forum does not pose a direct threat to the global economy, but it does illustrate some of the financial vulnerabilities that can stem from ultra-loose monetary and fiscal policies. In this Update we answer four important questions about the events of the past week.

1 February 2021

Global Economics Update

Surge in shipping costs adds to near-term price pressure

The surge in global shipping costs over the past six months is likely to be short-lived and several factors will dampen the full pass-through to consumer prices. Even so, it adds to a growing list of developments that point to a rise in inflation over the first half of this year.

19 January 2021
↑ Back to top