The global economy is expected to recover from the Great Recession of the first half of 2020 by 2021, largely due to the impact of the epidemic, Credito Y. Cassion predicts. The credit insurer estimates that the global economy will grow by 5% this year.
However, the report, released on Tuesday, points out that “the speed of recovery depends on the effectiveness of vaccine programs and the outcome of nutritional supplements” and that “financial and monetary support is important to support the process.” Nonetheless, Credito Y. Cassian estimates that the epidemic of economic collapse caused by the epidemic will be felt most strongly in 2021 “in the labor markets and the number of corporate bankruptcies, in the medium term, in the financial position of nations”.
According to credit insurer forecasts, advanced economies will grow by 3.9% by 2021, facing an overall decline in GDP (GDP) recorded by 2020. In the United States, the new administration is expected to pursue more restrictive politics. On the other hand, the trade agreement between the EU and the United Kingdom signifies greater trade sanctions, but this puts an end to the difficult Brexit possibility.
However, Govt-19 infections are still present in some key advanced markets and control measures are prohibited. Due to this situation, most markets will not be able to recover its pre-epidemic levels of GDP by 2021. Emerging Asian markets have been very effective in managing the virus. China expects 8.8% growth in 2021 due to sluggish demand, excluding the recession. Latin America had bad results. Mexico, which received limited financial support, is facing a long-term recovery, while Brazil, which has begun significant financial aid, has limited the depth of the recession by 2020.
According to current estimates, a good vaccination rate could lead to a permanent reduction in circulation restrictions in the middle of the year. However, companies may postpone or cancel their investments due to uncertainty about future demand for goods and services if calendars are slower than expected and social distance operations persist in the second half. This situation will reduce the economic recovery.
“The recession of 2020 is unique in that GDP and trade have been severely affected, but insolvency was low due to financial stimulus and the temporary paralysis of bankruptcy operations in many markets. Prudent debt management is key to success, ”said Andreas Dech, CMO of Atradius.