World Bank Warns The Global Economic Recovery Could Take “Five Years”

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Zero Hedge: World Bank Warns Recovery Could Take “Five Years”

Global economic activity around the world has stabilized in mid-September, though far below pre-COVID-19 levels as recoveries risk reversing if monetary and fiscal stimulus is not continued at rates seen in the first half of 2020. We noted Wednesday, a new OECD report offered some hope the global downturn is not as severe as previously thought but is still viewed as an “unprecedented” decline.

We also noted the OECD report is problematic for policy-makers who have unleashed easy-money policies during the pandemic to artificially inflate economies and boost risk assets, as policy support in the second half of the year might not be as great as what was seen earlier in the year (as is currently playing out in Washington with the prospect of a slimmed-down stimulus bill getting slimmer).

So with waning support from central banks and fiscal stimulus from governments, the quick rebound seen in the global economy has likely stalled, and the shape of the recovery will no longer resemble a “V” but more of a “W” or “U” or “L.”


WNU Editor: There is still a lot of unknowns. If a second Covid-19 wave results in another shut-down that may last until spring …. it is going to take more than five years for a economic recovery to take place.