The ’emerging market’ slump

Michael Roberts Blog

Forecasts of a global slump in the rest of 2020 are coming in droves from mainstream economists – it’s now the consensus that there will be a contraction in global real GDP in at least two consecutive quarters (Q1 and Q2), in the wake of COVID-19 pandemic and the ‘lock down’ in response.

The International Institute of Finance (IIF), the research body of international banks, now reckons that the US will contract by annualised 10% by end-June and Europe by 18%.

Deutsche Bank economists reckon that the first half of 2020 will experience the worst slump since the 1930s.  “The quarterly declines in GDP growth we anticipate substantially exceed anything previously recorded going back to at least World War II.”  Oxford Economics reckons the US economy will contract at annual rate of 12% by end-June.

But the mainstream remains optimistic.  All forecast a sharp recovery in the second half of…

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