The monthly GECS is intended to give a snapshot of developments in between the main quarterly GECS. In normal circumstances the economic outlook does not change dramatically from one month to the next.
1024_1.jpg/_jcr_content/renditions/original "GECS Q2 2020 cover of skyscrapers at dusk.")
The current conditions are far from normal: the global economy is facing the worst recession in decades as a result of the COVID-19 pandemic. In many economies the fall in output in the first half of 2020 has wiped out several years of economic expansion. Lockdowns are now being lifted in many countries, at the same time that global infections are reaching record levels. So, we have introduced on a temporary basis a short snapshot survey to be conducted in the intervening months between the quarterly GECS. The five questions in the monthly survey were introduced in the Q2 GECS conducted in the first half of June.
The August monthly survey took place between 3 and 10 August and gathered a total of 462 responses: these were sufficient to permit analysis of three key regions – Africa, Western Europe and Asia-Pacific. Over the last month official data have recorded the true scale of the economic damage in advanced economies during the April to June period when most economies had the maximum lockdown. Measured on a quarter on quarter basis the US economy contracted by 9.3%, Germany by 10.1%, France by 13.8% and Spain by 18.5%. The biggest fall so far recorded came in the UK with a 20.4% quarterly contraction in GDP. In every case these are by far the biggest quarterly falls in output since such data were first published in the 1930s.
Read the second monthly edition.
The five questions in the monthly survey were introduced in the Q2 GECS conducted in the first half of June. The July monthly survey took place between 3 and 10 July and gathered a total of 456 responses: these were sufficient to permit analysis of three key regions - Africa, Western Europe and Asia-Pacific.
These regions offer very different perspectives on the economic effects of the COVID-19 crisis. Western Europe (including the UK) is an advanced economic region that on the whole has suffered quite severely with prolonged and restrictive lockdowns that resulted in dramatic falls in economic activity – over 25% in the UK for example. Significant policy easing, including large scale fiscal transfers to support incomes has softened the blow for many households and businesses. Lockdowns are now being lifted and there are signs of economic recovery. In Africa COVID-19 arrived later than in the other two regions discussed here but infections are now rising rapidly in many countries. Emerging markets and low-income countries have much reduced capacity to provide fiscal support to businesses and households compared with advanced economies. The good news for Africa is that its relatively young population means that the health impact of the virus, including the mortality rate, will be less than elsewhere, Europe say, which has a much older demographic. (Over 90% of COVID-19 deaths occur in those aged 60 or over).
Read the first monthly edition.