Economic and financial risk insights - Global recession is testing economic resilience

Our baseline is for a global recession with global growth being well below 2% this year. We expect growth to decelerate quite abruptly across the board with a recession in Japan and the Eurozone. The coronavirus outbreak in the EU and US is still intensifying.

Key takeaways

  • We expect a global recession this year and no "V"-shaped recovery given the global coronavirus outbreak, tightening financial conditions and the weak economic resilience to start with
  • A number of G7 economies will see a recession, particularly Japan and the Eurozone
  • The risk of both a US recession and a China hard landing has increased to a very high 40%
  • We foresee further monetary easing across the board, though it will unlikely offset the economic disruption
  • US 10-year yields are likely to remain below 1% until end-2021 and are quite likely to drop subzero temporarily
  • Balance of risks remains tilted to the downside. Traditional policy tools make it much more difficult to manage the common global supply and demand shock


Economic insights Global recession is testing economic resilience

See also former Economic Outlooks