EU forecasts 'historic' 7.7 percent eurozone recession

17:32, May 06, 2020

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  EU predicts historic recession for this year

  European Economic Commissioner Paolo Gentiloni holds a news conference on the Spring 2020 Economic Forecast, amid the spread of the coronavirus disease , in Brussels, Belgium, May 6, 2020.The 19-member eurozone economy is expected to contract by a record 7.45 percent this year, according to the Spri

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  Global experts predict worldwide recession of 1.9 pct in 2020: German ifo Institute

  Around 1,000 economic experts from 110-odd countries and regions expect a global recession at 1.9 percent in 2020 due to the coronavirus crisis, according to a survey published by Germany's influential Ifo institute on Thursday.Europe has been hit "particularly hard" as gross domestic product in th

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  How to avoid a W-shaped recession

  (Photo: CGTN)"Those who cannot remember the past are condemned to repeat it," George Santayana famously quipped in 1905. It is a phrase that has been repeated for over a century, but rarely heeded. As COVID-19 decimates the global economy, our understanding of history could be the difference between a V- or U-shaped recession and a W-shaped one, in which incipient recovery is followed by successive relapses.As recently as March, V-shaped recoveries in individual economies seemed plausible. Once infections and deaths had peaked and begun to decline, the logic went, people would eagerly return to work. Economic activity might even get an extra boost, as consumers released pent-up demand.This is in line with the pattern of recovery from natural disasters, such as earthquakes and hurricanes, as well as the epidemic of severe acute respiratory syndrome in 2003. Though output in China – first reported the outbreak– did suffer as a result of SARS, it recovered so fast that annual GDP was hardly affected.Today, China reports that industrial production rebounded in March from its plunge in February. But, overall, it seems clear that forecasts of a V-shaped global recovery from COVID-19 are too optimistic.Policymakers may, however, be able to engineer a U-shaped recovery. In such a scenario, certain segments of the economy would be reopened, with employees separated physically and, if possible, temporally (in shifts). This would keep the economy going until the health crisis is under control, at which point all sectors could be restarted and a full economic recovery could begin.This scenario would require countries to ensure frequent, free testing on a massive scale. That is technically feasible, at least in high-income countries, though governance failures in many – such as the United Kingdom and the United States – have impeded its implementation. If effective tests for antibodies are developed, and the relationship between antibodies and immunity to COVID-19 is c...