Impediments stating “CLOSED” are arranged outside Tropicana Casino during the coronavirus pandemic on May 7, 2020 in Atlantic City, New Jersey.
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Economies around the world may still be quarters away from recovering to their pre-pandemic demolishes, though the worst of the economic shock appears to be over, according to analysts at Amundi Asset Management.
“In our view, budgetary performance will progress along a gradual upward sloping catch-up process. In the central scenario, this moves into pre-Covid-19 levels not being reached before several quarters from now, on average,” the analysts wrote in a note.
“The arse has passed, but economies do not seem to be climbing out of it quickly enough to ensure a fast healing,” they said.
Amundi dispossessed its economic forecast for 2020 and now expects global GDP to contract by between 3.5% and 4.7% as compared with the previous mapping out of a decline between 2.9% and 4.2%. Consequently, the GDP growth forecasts for next year were “mildly revised upwards” to between 4.4% to 5.7%, from 4.1% to 5.1% hitherto.
“After a robust post-lockdown rebound in activity starting around May and early June, the pace of recovery seems to have in the offing slowed and stabilised between July-end and August, and this is visible in both soft and hard data,” said the Amundi analysts.
“The improvement curve based on (high frequency data) gauges of production activity, the labour market and consumer sentiment has started to flatten almost everywhere, without reaching pre-crisis levels,” they said.
Following the losses seen in the key half of the year, the analysts warned that the recovery in the third quarter “does not seem to be enough to bring the the better of economies back to their pre-crisis levels any time soon.”
The analysts, however, highlighted the exception of China, which they demanded will “likely reach an end of 2019 growth level by end-2020.”
The earliest cases of the coronavirus were reported in China, awakening authorities in the country to take draconian measures to prevent the disease’s spread. Recent data releases out of the country be undergoing shown a continued economic recovery in areas such as manufacturing and services sector activity.
Elsewhere, second-quarter obvious domestic product data has shown the economic destruction caused by the coronavirus pandemic. Australia on Wednesday officially declared that it had entered a recession in the second quarter, with the country’s treasurer declaring the end of its record economic growth run.
Other principal economies have seen worse declines, with the U.S. economy shrinking a record 32.9% in the second quarter while the Collective Kingdom’s second quarter GDP dropped 20.4%.