What is the driving force for the global recovery in the multi-country economic recession in 2020?

(Financial World) What is the driving force for the global recovery of multi-country economic recession in 2020?

　　China News Service, Beijing, January 29 (Reporter Wang Enbo) Since the outbreak of the new crown epidemic, the global economy has been severely impacted. Judging from the recent economic data released by some major economies in 2020, recession has become the main theme.

　　The first estimate released by the US Department of Commerce on the 28th showed that the US economy will shrink by 3.5% in 2020, the worst performance since 1946.

Earlier, the German Federal Statistical Office announced that Germany's GDP in 2020 will fall by 5% year-on-year, and the first economic recession has occurred since 2010.

The Bank of Korea announced that South Korea’s GDP growth rate will be -1% in 2020, and the annual economic growth rate will experience negative growth for the first time since 1998.

　　Some countries have not yet released official data, but they have made predictions on economic growth, and the results are not optimistic.

　　For example, the Bank of Japan has recently slightly lowered its economic growth forecast for fiscal year 2020 (as of March 2021), and it is expected that Japan's real GDP will shrink by 5.6%.

The Central Bank of India predicts that GDP will shrink by 7.5% in the 2020 fiscal year (April 2020 to March 2021).

The Office of Budget Responsibility (OBR) stated that the UK's GDP in 2020 is expected to shrink by 11.3%.

The Bank of Canada predicts that the country's real GDP will fall by 5.5% in 2020.

　　However, according to data released by the National Bureau of Statistics of China, China’s GDP will grow by 2.3% in 2020, and China is likely to become the only major economy that achieved positive economic growth last year.

　　2020 is over. Looking at the future, can countries leave the recession behind and realize economic restart?

　　The International Monetary Fund (IMF) is more optimistic. Its latest report believes that the global economy will grow by 5.5% in 2021, an increase of 0.3 percentage points from its October forecast last year.

But the report also stated with reservations that the prospects for global economic recovery still have "extraordinary" uncertainties.

If vaccine promotion is slow, the new coronavirus mutates, or policy support is withdrawn prematurely, the prospects for global economic recovery will deteriorate.

　　The Bank of China Research Institute poured cold water.

The agency believes that the short-term recovery of the global economy does not mean a substantial recovery.

On the one hand, due to the reduction in working hours and increased unemployment due to the epidemic, residents’ incomes have fallen sharply, and global poverty has worsened.

On the other hand, even if the economy restarts, out of concerns about future downside risks, residents will tend to increase savings and enterprises are unwilling to expand production, leading to weak domestic demand.

　　More importantly, the epidemic has not calmed down one after another, and the return of economic activities in most countries to normal is nowhere in sight.

Where is the strong impetus for the global recovery?

　　Many people are counting on vaccines.

The Bank of Communications Financial Research Center pointed out that the new crown vaccine is the key to restarting the global economy.

Since mass production and vaccination are carried out in a gradual manner, the pace of economic restoration in various countries will be significantly different.

Developed countries first enter the process of mass production, distribution, and vaccination of vaccines, and may be the first to usher in recovery after the epidemic is effectively controlled.

　　However, Shen Minggao, chief economist of GF Securities, reminded that even according to the optimistic forecast, the overall GDP level of developed economies will still be difficult to return to the pre-epidemic situation this year. The GDP growth of the Eurozone, the United States and Japan in 2021 will not cover the losses last year.

Relatively speaking, emerging markets including China are still growth highlights.

　　As he said, China's economic recovery will not only bring benefits to the global fight against the epidemic, but will also be a major driving force for future recovery.

　　Based on the current estimated annual average exchange rate, China’s total GDP in 2020 will be approximately US$14.7 trillion, ranking second in the world and accounting for about 17% of the world economy.

The IMF said that China has been one of the engines of global economic growth for a long time, and China plays an important role in the current process of global economic recovery.

　　Shen Jianguang, chief economist of JD.com, pointed out that in 2020, China will take the lead in achieving economic recovery with more effective epidemic prevention and control measures, and quickly fill the gap in supply and demand caused by the global epidemic, becoming the last supplier of global commodities.

At the same time, the signing of the Regional Comprehensive Economic Partnership Agreement (RCEP) and the completion of the China-EU Investment Agreement negotiations will help consolidate multilateral cooperation networks and promote "re-globalization" after anti-globalization.

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