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Global Economy: Recovery Slowing Down: DIW Economic Outlook

Author

Listed:
  • Claus Michelsen
  • Paul Berenberg-Gossler
  • Geraldine Dany-Knedlik
  • Hella Engerer
  • Sandra Pasch

Abstract

The global economy recovered more quickly than expected in the third quarter of 2020. Following the coronavirus-related slumps, economic output increased by seven percent. A decrease in infection rates and thus an easing of containment measures contributed to re-normalizing production processes and trade. Private households also began demanding more consumer goods again, especially personal services. However, the second wave in fall 2020 will slow down the recovery. In 2020, global production will shrink by 3.4 percent; the growth rates in 2021 and 2022, 6.3 and 4.4 percent respectively, are likely to be stronger than forecasts in fall 2020. Despite this, there are many risks: Even though the vaccine breakthroughs are promising, other uncontrolled increases in coronavirus cases could occur. Furthermore, the extent to which corporate insolvencies will increase and how a wave of insolvencies would impact economic recovery cannot be predicted.

Suggested Citation

  • Claus Michelsen & Paul Berenberg-Gossler & Geraldine Dany-Knedlik & Hella Engerer & Sandra Pasch, 2020. "Global Economy: Recovery Slowing Down: DIW Economic Outlook," DIW Weekly Report, DIW Berlin, German Institute for Economic Research, vol. 10(50), pages 472-475.
    • Handle: RePEc:diw:diwdwr:dwr10-50-2
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    More about this item

    Keywords

    Business cycle forecast; ecoomic outlook;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions
    • F01 - International Economics - - General - - - Global Outlook

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