Economy

'Virus-hit Europe, US imperil world economic recovery'

G20 economies expected to contract by 3.8% in 2020, says global rating agency Moody's

Aysu Bicer   | 13.11.2020
'Virus-hit Europe, US imperil world economic recovery'

ANKARA

Global economic recovery is under threat due to the resurgence of coronavirus infections in Europe and the US, according to international rating agency Moody’s.

In a report released late Thursday, the agency said economic recovery has been picking up around the world but still remains fragile.

“A tentative economic recovery is underway but the path is beset by uncertainty,” said the report.

“Effective pandemic management, the development and distribution of a coronavirus vaccine, and the continuation of government policy support to households and businesses will determine the economic trajectory over the coming year.”

The speed of recovery will vary between countries since the impact has been more severe for some economies, Moody’s said.

It stressed that sustainable recovery is not possible in countries where new virus waves continue to disrupt economies.

The agency also revised its growth forecasts for G20 economies, saying they are expected to shrink by 3.8% this year and grow 4.9% in 2021 and 3.8% in 2022.

In August, Moody’s estimated that G20 economies will contract by 4.6% this year and grow 5.3% in 2021.

China’s economy is projected to fall by 2.2% in 2020 and rise by 7% next year, according to the latest projections.

Moody’s now expects India’s economy to shrink by 8.9% this year, lower than its earlier forecast of a 9.6% contraction.

The agency did not amend its projection for Turkey, saying its economy will narrow by 5% this year, before rebounding to 3.5% and 4% growth in 2021 and 2022, respectively.

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