World – Macroeconomic Scenario for 2020-2021: All are equal, but some are more equal than others…

  • Developed countries – What will the recovery look like beyond the "fake V"?
  • Emerging Countries – Time for some sorting?
  • Oil – Market still under pressure until a vaccine arrives
  • Monetary policy – Maximum flexibility
  • Interest rates – In a bubble
  • Exchange rates – Under the seal of US elections
  • Economic and financial forecasts

In summary

Just like the recession, the rebound is now widespread. Just like the recession, it is strong but uneven. It is largely mechanical and showing signs of weakening, stoking fears about its resilience once the support is dialled back. These fears are vague, but two things are crystal-clear: very long-lasting low interest rates, and chaotic, asynchronous global growth.

World – Macroeconomic Scenario for 2020-2021

According to the monthly indicators and surveys, the rebound has been widespread, just like the decline in activity before it. It has been just as forceful, but uneven, a signal that supply, demand and the sectors are recovering at different speeds and strengths. The service sector, which demands mobility and social interaction, is tending to show a natural lag compared to the manufacturing sector. Depending on the type and effectiveness of support measures, the demand recovery is preceding the supply recovery (large developed countries in which household income, and even jobs, have largely been preserved), while supply is pulling dangerously ahead of demand (as in China, where jobs and income have suffered while the industrial machinery starts back up, thanks to public demand and bank loan stimulation). As such, the recovery taking shape is far from uniform or synchronised, and could topple into chaos.

Catherine LEBOUGRE, Economist