I've just updated my calculations of world GDP (blue line in chart below) As you can see GDP growth (using official Chinese GDP data, not my own estimates) has been trending moderately upwards up to Q4 2019. IP has already started to fall. I expect the year-on-year decline in world IP to be at least as bad as during the GFC, which suggests world GDP could fall 4%. It'll prolly be worse than that, given that outside China, the world is only just starting to contract by the 15% that happened in China when it went into lockdown. It's possible that this decline may be short lived, but it is equally possible that the demand crunch resulting from the supply crunch (people out of work leading to plunging incomes, leading to further declines in employment and incomes, and so on in a doom loop) will take months to reverse itself. The GFC was a demand crunch caused by a financial crisis. From its peak in early 2008, world IP took 3 years to reach that level again, despite massive fiscal stimulus from the USA and China, and massive monetary stimulus from every country. This disruption is much worse.
One factor which is positive. The Right, which is very hostile to budget deficits, has been forced to accept emergency measures designed to prop up incomes and spending. And at current interest rates, fiscal policy will be much more effective than monetary policy.
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