Savings are still a quarter of an hour from returning to pre-coronavirus levels, Amundi warns

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According to Amundi Asset Management analysts, economies around the world may still be far from regaining their pre-pandemic levels, even though the worst of the economic shock appears to be over.“In our opinion, economic performance will progress through a gradual upward catching-up process. In the central scenario, this translates into pre-Covid-19 levels that will not be reached for several quarters, on average, ”the analysts wrote in a note.

“The bottom is gone, but the savings don’t seem to be coming out fast enough to ensure a quick recovery,” they said.

Amundi has downgraded its economic forecast for 2020 and now expects global GDP to contract from 3.5% to 4.7% compared to the previous projection of a decline between 2.9% and 4, 2%. As a result, the GDP growth forecast for next year has been “revised slightly up” to 4.4% to 5.7%, from 4.1% to 5.1% previously.

“After a solid rebound in post-lockout activity from May and early June, the pace of the recovery appears to have slowed down and stabilized between late July and August, which is visible in both the data flexible and firm, ”Amundi analysts said. .

“The recovery curve based on gauges (high frequency data) of production activity, labor market and consumer confidence has started to flatten almost everywhere, without reaching pre-crisis levels. », They declared.

Following losses in the first half of the year, analysts have warned that the recovery in the third quarter “does not appear to be sufficient to bring the majority of economies back to their pre-crisis levels any time soon.”

Analysts, however, pointed to the exception of China, which they said “will probably reach a level of growth at the end of 2019 by the end of 2020”.

The first cases of the coronavirus have been reported in China, prompting the country’s authorities to take drastic measures to prevent the spread of the disease. Recent overseas data releases have shown continued economic recovery in areas such as manufacturing and service sector activity.

Elsewhere, second-quarter gross domestic product data showed the economic destruction caused by the coronavirus pandemic. Australia officially announced on Wednesday that it had entered a recession in the second quarter, with the country’s treasurer declaring the end of its record economic growth.

Other major economies saw worse declines, with the US economy shrinking a record 32.9% in the second quarter while UK GDP in the second quarter fell 20.4%.

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