As tumultuous as times are, we must always persevere. And so it is our duty to provide you with our mid-year outlook on the economy and financial markets.
Whether it be wars, pandemics, financial crises, or bubbles bursting, the global economy has a history of resiliency, and even in the aftermath of the COVID-19 outbreak, it will be gleaming once again. The scale of the global lockdown likely caused the most significant global recession in the post-World
War II era. However, it will likely be the shortest recession on record as the dawn’s early light of a recovery is signaling a robust rebound in the second half of 2020. Leading indicators and real-time activity metrics suggest the ‘bottom’ occurred in April, as countries eased restrictions, labour market conditions improved and consumer spending was revitalised. Admittedly, the depth of the decline (possibly -35% quarter-over-quarter annualized gross domestic product (GDP) in the second quarter for the United States) means it will take time for any economy to return to pre-COVID-19 GDP levels. For the United States we expect this will not occur until the end of 2021 at the earliest. As a result, our forecast is that US GDP for 2020 will be -5.3% before
accelerating to 4.9% in 2021.
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