World Outlook

Updated: November 2, 2020

Struggling together.

The sudden, devastating global recession that saw almost every country in the world implement strict lockdown measures to control the spread of COVID-19 led to huge business closures and job losses. World economic activity started to pick up steam in the second half of this year, and this should propel real GDP to expand by 2021. This is assuming that a second wave of the virus does not derail the global economy.

Contents of the Autumn 2020 edition include:

  • Recovery under way but huge uncertainty remains
  • Latin America
  • European Union
  • Asia-Pacific
  • The future of working from home
Pumpjack; masked woman in front of airline arrivals sign; mask and sanitizer on a desk

Key findings

The world economy will decline by 5.0 per cent this year, but a recovery is under way and growth in the 5.0 per cent range should occur in 2021.

There are, however, huge risks to the outlook as the virus has returned with a vengeance to many parts of the world and forced some countries to close retail and other outlets and ban large gatherings.

U.S. interest rates will not increase until at least 2023 as monetary authorities contend that the economy is too fragile to handle higher rates while inflation remains under control.

Latin America has not done a good job of managing the virus, in part because leaders of countries like Brazil have downplayed the virus’s severity. In addition to COVID-19, the region is also dealing with Argentina’s never-ending debt saga and the ongoing collapse of the Venezuelan economy.

The Asia-Pacific region is in the best shape, mainly because the Chinese economy is undergoing a solid recovery, a development that has boosted export demand in countries like South Korea and Taiwan.

The United Kingdom is dealing not only with a resurgence of the virus but also with the rapidly approaching end-of-year deadline for negotiating a new trade agreement with the European Union following Brexit.

Most firms will likely take a even after a vaccine becomes widely available. Many workers will return to the office, but most will spend only part of the week in the office and will continue to work from home a few days of the week.