The optimism about the gradual recovery of the global economy is ebbing away as this revival is too fragile. Experts at Pacific Investment Management Co. (PIMCO) warn that a new downturn is just around the corner.
Joachim Fels, a global economic advisor at Pacific Investment Management Co., is certain that the second coronavirus wave is imminent that will inevitably smash the green shoots of recovery. At present, upbeat economic metrics come as a result of a sensible policy implemented by the governments of advanced economies. They introduced large-scale financial aid programs that actually mitigated the aftermath of the pandemic. The US authorities managed to rescue the US dollar from sharp depreciation and cured the labor market of record high unemployment. Germany encouraged a revival of its industrial production. Even emerging markets have been able to lick wounds. Nevertheless, experts point out that the lull before the storm will be followed by another tough challenge. In the meantime, pharmaceutical companies need a long time for their vaccine research and trials. No one can guarantee that the vaccine will be available to hospitals around the world in the short term. Unfortunately, the world will hardly avoid the resurgence of COVID-19. The feeble global economy is braced for another devastating blow. Warwick McKibbin at the Brookings Institution in Washington, D.C. reckons that the global economy could suffer the pandemic-induced losses of $35 trillion in the nearest years.
When it comes to the US, its economic slump is festered by the ballooning federal debt. It is expected to reach the same value as the total national economic output (GDP) by the end of 2020. This appalling forecast was unveiled by the Senate Budget Committee.
