But how bad could it get? There could be a stronger than anticipated hit to global growth in Q2 2020, with a decline of 8.2%, with a smaller uplift of 5.9% in Q3 and 2.8% in Q4, with most regions potentially experiencing double digit hits in Q2. But although some countries and territories may experience another drop in quarter-on-quarter GDP growth as a possible second wave of the virus hits in the latter half of 2020 or early 2021, year-on-year global growth may likely resist this ‘W’ recovery, declining more steeply by 7.9% in 2020 and recovering by 4.6% in 2021 and 3.0% in 2022.
Of course, when we say ‘recover’ and ‘rebound’, this does not necessarily mean to pre-pandemic levels; it could take until the latter half of 2021 to return to 2019-Q4 levels. And some countries and territories may fare worse than others; the downside scenario incorporates potential double-digit hits to annual GDP growth in some of the world’s largest markets, with recoveries to 2019-Q4 levels not expected until 2024 or later.
Why do we think differently to the other global forecasters? Our economic analysis integrates Eurasia Group’s predictive political intelligence to help guide KPMG professionals’ thinking on how the health crisis is likely to be managed going forward – that is, how the health vs. economics political equation will be answered in major markets, and how long lockdown restrictions will persist.
The future may be uncertain, but integrating plausible, in-depth political and economic scenarios into your investment frameworks, financial models, business planning and risk management processes can help you identify and prioritize the critical risks - and opportunities - facing your business. Please feel free to get in touch (mail to:firstname.lastname@example.org) for our analysis on your specific market.