What else could go wrong for world economy before 2020 is done
The world economy’s rebound from the depths of the coronavirus crisis is fading, setting up an uncertain finish to the year.
The concerns are multiple. The coming northern winter may trigger another wave of the virus as the wait for a vaccine continues. Government support for furloughed workers and bank moratoriums on loan repayments are set to expire. Strains between the U.S. and China could get worse in the run-up to November’s presidential election, and undermine business confidence.
“We have seen peak rebound,” Joachim Fels, global economic adviser at Pacific Investment Management Co., told Bloomberg Television. “From now on, the momentum is fading a little bit.”
That sets up a delicate balancing act for go nments. They’ve injected almost $20 trillion in fiscal and monetary support, in an effort to get the economy as far back to normal as is feasible in a pandemic, and can point to plenty of successes.
In the US, unemployment fell sharply in August and the housing market has been a bright spot. China’s steady recovery is cited by optimists as a guide to where the rest of the world is headed, while Germany is posting some decent industrial data too. And emerging markets are getting a breather from the dollar’s decline.
But keeping up the momentum on all these fronts won’t be easy. It would likely require policy makers to top up their stimulus efforts, at a point when some are looking to cut back instead. And for all the scientific progress with vaccines, they won’t be available anytime soon on the scale needed to bring the virus under tight control -- a key condition for business-as-usual.
Meanwhile, there are headwinds. On labor markets, for example, go nment aid helped to drive an initial rebound -- which may have been the easy part. Next up is the long slog of retooling businesses, reallocating resources, and retraining workers in industries that are no longer viable. That kind of restructuring could play out for some time.
Already this month, some of the world’s best known industrial brands have signaled job cuts are on the way.
AP Moller-Maersk A/S is planning a major overhaul that’s set to affect thousands at the world’s biggest container shipping company. Ford Motor Co is cutting about 5% of its US salaried workers, and United Airlines Holdings Inc. will eliminate 16,000 jobs next month as it shrinks operations.
There are other worrying signs too.
In China, which contained the virus months ago, consumers remain reluctant to spend and the nation’s biggest banks just posted their worst profit declines in more than a decade as bad debt ballooned.
US lawmakers continue to haggle over more fiscal stimulus, which may be needed to sustain the recovery in the world’s largest economy.
Adding 1.4 million jobs in August was “a big step in the right direction,” said Ryan Sweet, head of monetary policy research at Moody’s Analytics. But the economy needs to maintain that kind of pace, he said, and “without fiscal stimulus that will be hard to do.”
‘Not Looking Good’
In Europe, gauges of activity are fading, and factories are trying to cut costs as weak demand and price cuts squeeze profit margins. While France and Germany have extended their furlough programs, the U.K. plans to end its version in October, potentially putting millions of jobs at risk.
Japanese Prime Minister Shinzo Abe, who announced his resignation last month on health grounds, warned in a press conference that “winter is coming” and the nation will need to gird to contain the virus.
Stock markets are vulnerable to disappointment in economic numbers in the coming months amid a gradual curbing of emergency fiscal support.
Overshadowing everything is the continued spread of the virus, with flare-ups around the world.
Even when a vaccine is devised, making it available worldwide on the necessary scale is going to take time, according to Warwick McKibbin of the Brookings Institution and Australia National University. His models suggest that the virus could cost the world economy some $35 trillion through 2025.
“You have to get quite a lot of the population vaccinated before the economic costs start to come down,” he said.
译文来源：三泰虎 /p/50755.html 译者：Jessica.Wu
We are interested in worst situation about economy of India because of present Modi Govt.
Till the time feku chaiwala will be there Indian economy will never grow, we are headed toward economic downfall if corrective actions are not taken now...just giving jhumlabazi will not help anyone.
World economy will make a comeback sooner than later but the same cannot be said about the Indian economy. We are really in a mess thanks to Modi. He speaks on all subjects but not on economy and related matters like unemployment. Frankly he has no idea how to address the issue. He will go to the Himalayas after 2024 leaving all of us to face the music. Please leave now so someone more efficient can handle the situation better.
World is facing economic slowdown because of Corona however our economy was on ventilator long Before that...poor Corona came as a rescue lame excuse for demolition of economy by govt.
phuddu PM is expert in wreaking disasters on his own people, he's best at doing that, till he's there it will keep getting worse n worse,
media always says opposite
Don't believe the media. The best bet is the markets as the traders put their money where their mouth is! when the markets go bust so does the economy! and vice versa
Truth Shall Triumph
When the Ship hits the Ice Berg. The captain , Passangers go down along with the Ship. Trust the Captain, but keep eye on him.
The world over, economic situation is not encouraging because of pandemic. In India situation is compounded by nefarious activities of two neighbouring countries. China is further instigating other countries like Nepal to poke nose. As if this is not sufficient, our opposition political parties have been making all out efforts to make situation worse.
This is expected, but we need to focus reviving with making sure that we do not lax on some small wins.
The pandemic has not yet been beaten.
Economy does look weary as of now, but sure will rebound better than Pre-Pandemic era, once this Pandemic passes off.
THANKS TO MODIJI AS WE ARE ABLE TO WITHSTAND WITH HIS LEADERSHIP SUCH HEAVY DAMAGES IN ALL FRONT TO OUR NATION
One world war will be the one worst thing that could still happen in 2020.