The Strategist

Experts: Damage to the global economy from COVID-19 may reach $ 35 trillion

09/08/2020 - 03:06

The damage to the global economy from coronavirus can reach $ 35 trillion by 2025. The global economic recovery is slowing down, and states around the world may face new problems by the end of the year, experts warn.

The global economic recovery after the crisis caused by the coronavirus is slowing down, and by the end of 2020, countries may face new problems, experts interviewed by Bloomberg say. The total damage to the global economy by 2025 could reach $ 35 trillion, estimated Warwick McKibbin, the professor of economics at Australian National University. "We'll have to vaccinate a lot of people before the economic costs begin to decline," he said. It will take a long time to make the vaccine widely available worldwide, he warned.

There are many reasons for concern in terms of the economy this year, Bloomberg said. Winter in the northern hemisphere could provoke another wave of the virus until the vaccine is ready. Government support for employees and bank moratoriums on loan payments are gradually expiring. Tensions between the United States and China could intensify ahead of the presidential elections in November, which could also negatively affect business sentiment.

Among the worrying factors, Bloomberg highlights the fact that Chinese consumers are still not spending at the same level, and the largest banks have reported the worst fall in profits in more than 10 years due to the growth of bad debt. In Europe, factories are trying to cut costs due to low demand, and low prices are affecting profits. France and Germany have extended government support programs, but Britain plans to end its own in October, putting millions of jobs at risk.

At that, there are positive signs: governments have sent about $ 20 trillion in tax and monetary support and can report on their successes, Bloomberg admits. In the US, unemployment fell sharply in August and the property market rose. The gradual recovery of the Chinese economy "optimists call the guide by which the rest of the world is moving"; German industry is also showing good numbers.