Over the next 3-6 months we expect global economic growth to be reasonable, based on the outlook for a viable vaccine, central banks’ ultra-loose monetary policy and governments’ fiscal stimulus measures reaching over USD 13 trillion or 15% of global GDP.
To maintain growth momentum in the US, it will be key for Congress to bridge the gap to a “post-COVID-19 economy” with another fiscal stimulus bill. The bill must pass before the election in November 2020.
The European fiscal response has been adequate, but the European Central Bank (ECB) needs to do more to support the extra fiscal stimulus. Otherwise, the ECB’s inflation target of 2% loses further credibility.
China is the only major economy likely to achieve positive GDP growth in 2020 and the upswing is confirmed. With the 100th anniversary of the Chinese Communist Party next year, Beijing is unlikely to allow growth to relapse.