Future of the Global Economy

Future of the Global Economy

Assessing Growth Opportunities and Pipelines to Address the COVID-19 Crisis

RELEASE DATE
23-Apr-2020
REGION
Global
Research Code: 9AE5-00-2B-00-00
SKU: CI00697-GL-MT_24336

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Description

The global economy is facing what is likely to be the worst economic disruption since World War II. As the COVID-19 pandemic rapidly spreads globally, the concurrent economic fallout of this health crisis is expected to be grave. Frost & Sullivan has analyzed the scale of impact on global GDP growth and other macroeconomic elements through scenario-based modelling, factoring in the constantly evolving elements of this crisis. The economic impact and recovery outlook is based on two probable scenarios--the Severe Pandemic Scenario and the Global Emergency Scenario.

The research also draws a clear parallel with a baseline scenario of COVID-19 non-occurrence and also against the 2009 financial crisis; thereby, helping to understand the divergence from baseline growth expectations and the expected time period to reach pre-crisis GDP levels.
The research offers insights into the implications of the pandemic on key macroeconomic indicators such as trade values, unemployment, inflation, and oil prices. The pressure on oil prices partially comes from a substantial reduction of global oil demand due to travel restrictions, both via road and air. Although the OPEC+’s production cut decision should bring some respite to tumbling prices, it is insufficient prevent a sharp price slide in H1 2020. Trade, in 2020, is expected to contract sharply because of protracted supply chain disruptions and demand constraints, compelling businesses to reorient supply chains and production processes. The global unemployment rate is expected to overshoot the levels seen in 2009, with the most severe impact expected across sectors such as food and beverage, accommodation, and manufacturing.
Globally, governments have rolled out unprecedented levels of fiscal stimulus packages to stem economic decline and provide a boost to the economy, with the US gearing up for the highest levels of financial support for hard-hit sectors and citizens. Similar interventions from the European Union and some Asian economies have created opportunities for businesses to leverage these provisions to cushion the expected financial blow. Similarly, the loose monetary policy, evident through record low interest rates and other factors, should help businesses avail of the low-cost credit.

The research also provides perspective on recovery expectations, their implications, and regional differences depending on the severity of the outbreak and the range of government responses. Under the Severe Pandemic Scenario, emerging markets are expected to be more resilient, with quicker recovery compared to the developed markets.

The research also examines growth opportunity levers for business, while shedding light on key economic and business strategy expectations during the recovery period.

Key Issues Addressed

  • What is the scenario-based outlook for world GDP growth?
  • How do different economies stand to get affected from Covid-19?
  • What is the outlook for crude oil prices?
  • By what levels will global trade contract?
  • How severe will the unemployment situation be in 2020?
  • How different is the economic impact of this crisis compared to that of the 2009 financial crisis?
  • What stimulus packages have been offered by different countries?
  • What trajectory will global and regional recovery take?
  • What changes can be expected during the recovery process?
  • What are some of the growth opportunities that businesses can leverage?

Author: Neha Anna Thomas

Table of Contents

COVID-19 Impact Summary

2020 Global Economic Forecast

Top 5 Predictions for 2020

Top 5 Predictions for 2020 (continued)

Global GDP Growth Impact: The Financial Crisis of 2008-09 vs COVID-19

Impact on Key Macroeconomic Indicators

Global GDP Growth Impact Discussion

Implications for Global Trade, Unemployment, and Inflation

Implications for Key Economies

Global Economic Stimulus Measures

Country-specific Economic Stimulus Measures

Country-specific Economic Stimulus Measures (continued)

Country-specific Economic Stimulus Measures (continued)

Country-specific Economic Stimulus Measures (continued)

Growth Recovery: Stretched V or U Curve Recovery, Partial 2021 GDP Recovery

Recovery Trajectory of COVID-19 and the Financial Crisis

Regional Recovery: Stretched V or U Curve Recovery Across Regions, with China to See Q2 2020 Rebound

Key Macroeconomic Indicators Impact and Recovery Forecast

Recovery Expectations and Implications for the Global Economy

COVID-19 Recovery Expectations and Implications for Global Trade, Unemployment, and Inflation

Key Expectations During the Near-Medium Term Global Economic Recovery Process

Growth Opportunity Levers

Key Takeaways

About the Growth Pipeline Engine™

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Related Research
The global economy is facing what is likely to be the worst economic disruption since World War II. As the COVID-19 pandemic rapidly spreads globally, the concurrent economic fallout of this health crisis is expected to be grave. Frost & Sullivan has analyzed the scale of impact on global GDP growth and other macroeconomic elements through scenario-based modelling, factoring in the constantly evolving elements of this crisis. The economic impact and recovery outlook is based on two probable scenarios--the Severe Pandemic Scenario and the Global Emergency Scenario. The research also draws a clear parallel with a baseline scenario of COVID-19 non-occurrence and also against the 2009 financial crisis; thereby, helping to understand the divergence from baseline growth expectations and the expected time period to reach pre-crisis GDP levels. The research offers insights into the implications of the pandemic on key macroeconomic indicators such as trade values, unemployment, inflation, and oil prices. The pressure on oil prices partially comes from a substantial reduction of global oil demand due to travel restrictions, both via road and air. Although the OPEC+’s production cut decision should bring some respite to tumbling prices, it is insufficient prevent a sharp price slide in H1 2020. Trade, in 2020, is expected to contract sharply because of protracted supply chain disruptions and demand constraints, compelling businesses to reorient supply chains and production processes. The global unemployment rate is expected to overshoot the levels seen in 2009, with the most severe impact expected across sectors such as food and beverage, accommodation, and manufacturing. Globally, governments have rolled out unprecedented levels of fiscal stimulus packages to stem economic decline and provide a boost to the economy, with the US gearing up for the highest levels of financial support for hard-hit sectors and citizens. Similar interventions from the European Union and some Asian economies have created opportunities for businesses to leverage these provisions to cushion the expected financial blow. Similarly, the loose monetary policy, evident through record low interest rates and other factors, should help businesses avail of the low-cost credit. The research also provides perspective on recovery expectations, their implications, and regional differences depending on the severity of the outbreak and the range of government responses. Under the Severe Pandemic Scenario, emerging markets are expected to be more resilient, with quicker recovery compared to the developed markets. The research also examines growth opportunity levers for business, while shedding light on key economic and business strategy expectations during the recovery period.--BEGIN PROMO--

Key Issues Addressed

  • What is the scenario-based outlook for world GDP growth?
  • How do different economies stand to get affected from Covid-19?
  • What is the outlook for crude oil prices?
  • By what levels will global trade contract?
  • How severe will the unemployment situation be in 2020?
  • How different is the economic impact of this crisis compared to that of the 2009 financial crisis?
  • What stimulus packages have been offered by different countries?
  • What trajectory will global and regional recovery take?
  • What changes can be expected during the recovery process?
  • What are some of the growth opportunities that businesses can leverage?

Author: Neha Anna Thomas

More Information
No Index No
Podcast No
Author Neha Anna Thomas
Industries Cross Industries
WIP Number 9AE5-00-2B-00-00
Is Prebook No
GPS Codes 9A6B