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Rabat – A majority of economists believe that the already-grim global economic recovery outlook is only worsening. According to a recent Reuters poll, the COVID-19 pandemic has far from finished its wrath, causing socio-economic havoc worldwide.
The international news organization asked more than 250 economists to share their expertise and perspectives. Of the surveyed sample, 80% of nearly 100 respondents said economic outlook had “worsened or at best stayed the same.”
As the year reaches a mid-point, economists are predicting greater economic loss and continued recessions.
Reuters noted the threat of currency inflation and deflation and the high trade tensions worldwide. World stocks also plummeted to their lowest point in over a week on June 25 as COVID-19 cases continue to surge throughout the world.
Ethan Harris, head of global economics research at Bank of America, said, “We see three kinds of risks going forward. The first is that the virus comes back. That could trigger a reversal of the reopening process. The second risk is monetary and/or fiscal fatigue.”
“Governments have been very aggressive in countering the shock. However, monetary policy is now scraping the bottom of the policy barrel. More fiscal stimulus is likely to come in major developed economies, but it could be slower and smaller. The third risk is the second-round shock could be even worse than we assume.”
While in the early stages of the pandemic the world economy was forecast to shrink slightly more than what is now predicted (from 3.7% to 3.2%), some economists believe that the global GDP is not expected to surpass pre-pandemic levels until late 2021.
Three years down the road, the world’s biggest central banks may finally reach their inflation targets after prolonged disruption.
In addition to a potential second-wave of COVID-19 cases, price increases and lower consumption demands could lead to a reduced supply of goods and services, further affecting economic recovery.
While it is impossible to predict the full extent of the damage done by COVID-19, economists predict there will be no quick or easy breakthrough to fix the financial woes of the current time.
