Here’s a round-up of some of the latest analysis and reports from financial institutions, management consultants and economic forecasters.

The forecasts for global GDP trend this year are generally heading in a downwards direction as they are revised and updated.

Fitch Ratings has revised its forecast for world GDP reduction in 2020 to 3.9%

Chief economist for the company Brian Coulton summed it up: “This is twice as large as the decline anticipated in our early April GEO update and would be twice as severe as the 2009 recession…

“Macro policy responses have been unprecedented in scale and scope and will serve to cushion the near-term shock. But with job losses occurring on an extreme scale and intense pressures on small and medium-sized businesses, the path back to normality after the health crisis subsides is likely to be slow.”

Accountancy giant Deloitte has mapped three possible economic recoveries ranging from mild to severe.

In the best case scenario its chief global economist Dr Ira Kalish said: “A prolonged recession with weak supply and demand combined with financial system shocks wreaks havoc on social and economic life, but not all countries suffer to the same degree. Those that faced the pandemic sooner and reacted more aggressively bounce back faster, while those slower or less consistent in their responses are hurt more deeply and for longer. Before long, virtual life is real life in many places.”

KPMG’s chief economist Yael Selfin has looked at the impact of COVID-19 on various regions of the UK. It has London as the least affected with economic contraction of 7.3% in 2020 bouncing back to growth of 8% in 2021. The UK’s car manufacturing centre, the West Midlands, is forecast to be hardest his with contraction of 10.1% in 2020 and growth of 11.3% in 2021.

Selfin said: “In the short term, our analysis highlights how the government’s ambition to ‘level-up’ the UK will face a setback as a result of the pandemic. We expect that the gap between performance in London and the rest of the UK will widen this year.”


If the economic outlook is so dark, why are global equities rallying (well, they have been this week)?

That was the question posed by Deloitte’s chief economist Ian Stewart.

He said of investors: “Their renewed enthusiasm for equities seems to be predicated on the idea that it is unwise to fight central banks – if central banks want to raise asset prices they have infinite ability to create money, and to make it happen. The hope, too, is that easier monetary and fiscal conditions will ensure that the slowdown is short-lived and that activity, and profits, will bounce back next year.”


Goldman Sachs senior advisor Steve Strongin has commented on the pattern of economic recovery post coronavirus.

“The initial recovery will be swift in the parts of the economy that are easier to restart, such as manufacturing. The transportation sector will bounce back—albeit from record-low levels—although activity isn’t likely to reach pre-crisis levels. Meanwhile, regions with less community virus spread are likely to reopen sooner than in places that have been hit hard. In addition, the cities where restrictions were the greatest will see the sharpest rebound.

“It’s likely that the overall level of output remains lower than pre-crisis levels for some time.”


Meanwhile JP Morgan Alex Dryden has been looking at why oil prices turned negative and what the future holds.

“Oil contracts settle physically, meaning individual buyers must take possession of the commodity upon settlement and pay all associated storage costs, which are often expensive. Spot oil prices and near-term contracts have turned negative because oil holders are willing to pay investors to take the commodity off their hands to avoid those expenses…

“The oil futures curve is currently in ‘super contango’ whereby the implied oil price of near-term contract may be very low but the market is implying a price for WTI of 35 USD a barrel one year from now. As a result, it seems safe to say that the pressure of negative oil prices will not be in place forever.”