Experts predicted new problems in the world economy before the end of this year. This is reported by Bloomberg.
Experts noted the recovery of the global economy recently, but many fears remain relevant. Thus, according to Joachim Fels, a global economics adviser at Pacific Investment Management, countries are already experiencing a peak of recovery, after which the recession will begin.
Governments in developed countries have already invested trillions of dollars in support measures to bring the economy back to normal as much as possible in the face of a pandemic. As a result, unemployment fell sharply in the United States in August, and the situation in the housing market improved. China’s economy is recovering, and production is growing in Germany. At the same time, emerging markets have received a “respite” due to the fall of the dollar.
But it will not be easy to maintain positions on all these fronts, economists believe. This will require the authorities to step up efforts to stimulate the economy at a time when many are ready to curtail support measures.
In the United States, for example, 1.4 million jobs were created in August. As Ryan Sweet of Moody’s noted, the economy should “maintain this pace”, but without financial support, it will be difficult to do so.
There are other warning signs. Earlier this month, some big brands announced job cuts. Among them are Ford Motor Co. and United Airlines Holdings Inc.
In addition, tensions between the U.S. and China may increase in the run-up to the November presidential election. This will undermine business confidence, the article notes.
In China, where a few months ago the coronavirus was localized, consumers still do not want to spend money. At the same time, the country’s largest banks reported the worst fall in profits in more than a decade due to the growth of bad debts.
European factories are trying to cut costs as weak demand and falling prices hit profits.
Another problem is the risk of a second wave of coronavirus. Warrick McKibbin of the Brookings Institution warns that it will take a long time to deploy vaccinations around the world.
He estimated the damage to the global economy due to the pandemic in the coming years at $35 trillion.