By Tom Burnett CFA
On June 10, 2020, the Organization of Economic Cooperation and Development in Paris issued its economic forecasts, updated to reflect the Covid-19 pandemic and its impact on global growth. The forecasts assume two different paths—single outbreak and a possible recurrence or “double” event.
Under the single impact scenario, global GDP growth would decline by 6.0% in 2020, compared to growth of 1.6% in 2019. Global unemployment would average 9.2%, up from 5.4% in 2019. The U.S. growth rate would decline from a positive rate of 2.3% in 2019 to a negative rate of 7.3%, the worst decline since the Recession of 2008-9.
In the double impact case, global GDP declines by 7.6% and the global unemployment rate would average more than 11%. The rate of GDP decline for the U.S. would be 7.6%. The EU decline in GDP would be 11.0%, much larger than the expected 9% decline under the single impact case. China would see a decline of 3.7% in the “double” case, or 2.6% if the pandemic does not flare up again.
Tom Burnett CFA is Director of Research