World Bank: 5 years to recover from COVID-19. If everything goes well
The first predictions of how, or how much, the economy will recover after the economically and humanly destructive tide caused by the epidemic are beginning to be seen.
According to the OSCE, the economic recovery is slowly starting, but at a very low rate, with no rebound in a V, but somewhat in an L, and, above all, at the end of 2021 we will have a gap in world GDP compared to what was expected. ante covid-19 for $ 7 trillion.
World bank chief economist Carmen Reinhart painted an even darker picture of the situation at a conference in Madrid:
" There will likely be a rapid rebound as all lockdown-related restraint measures are lifted, but a full recovery will take up to five years, "
“ Central banks have tried to provide liquidity to avoid hitting more families. But as much as the central banks give support, there are companies that will not be active again, there are closed restaurants or shops that will not reopen, there are houses that will take a long time to find a job, there are airlines or hotels that will not survive. long without normal mobility. There will be many bankruptcies: if you look at the data from the rating agencies, S&P, Moody's, Fitch, the amount of the reduction in credit quality since the beginning of the year, both at corporate and sovereign level, has been a record. Nor are central banks omnipotent: no matter how much credit support is given, at some point we have to face the deterioration of the financial system, and this is not a criticism: it is inevitable due to the deep downturn in the economy. In these conditions, we must think of cuts that allow new credits for the recovery “.
Of course, being the World Bank, the solution is always in the cuts, even if they cripple, not accelerate, the recovery itself. unfortunately Keynes has been out of these institutions for a long time. That said, however, there remains yet another blow to the words praising the "Ready recovery" of the guitar player alas who has come to lead the MEF: There will be no recovery soon, and everything the government says is just a set of nonsense and illusions. We hope that the Italians, despite the media, realize this well.
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The World Bank article : 5 years to recover from COVID-19. If all goes well it come from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/world-bank-5-anni-per-la-ripresa-dal-covid-19-se-tutto-va-bene/ on Fri, 18 Sep 2020 07:00:54 +0000.