Coronavirus Pandemic Plunging Global Economy into a Serious Recession: DIW Economic Outlook

DIW Weekly Report 24/25 / 2020, S. 280-282

Claus Michelsen, Guido Baldi, Geraldine Dany-Knedlik, Hella Engerer, Stefan Gebauer, Malte Rieth

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Abstract

The consequences of the ongoing 2020 coronavirus pandemic are leaving deep marks on the global economy. In the first quarter of 2020, global production sank by 15.5 percent over the course of the worldwide lockdown. Since containment measures in many countries were mainly implemented during the second quarter of 2020, the slump in the first half of 2020 is likely to be even more severe overall. Due to the expansive containment measures in many countries and massive limitations on production and sales from March 2020 to summer 2020, DIW Berlin is lowering its forecast for the year drastically from 2.5 percent to -4.9 percent. It is also likely that the significant production losses and the serious slump in the service sector will be unable to be compensated for in 2021. However, for 2021, DIW Berlin expects an increase in global production of 5.5 percentage points. Of course, the possibility of further coronavirus waves poses risks and trade conflict escalations cannot be ruled out conclusively.

Geraldine Dany-Knedlik

Research Associate in the Macroeconomics Department

Stefan Gebauer

Research Associate in the Forecasting and Economic Policy Department

Claus Michelsen

Head of Department in the Forecasting and Economic Policy Department

Malte Rieth

Research Associate in the Macroeconomics Department

Hella Engerer

Research Associate in the Energy, Transportation, Environment Department

Topics: Business cycles



JEL-Classification: E32;E66;F01
Keywords: Business cycle forecast, ecoomic outlook
DOI:
https://doi.org/10.18723/diw_dwr:2020-24-2