- Trading Post-Crisis: Chances and Opportunities
- Is the Global Economy recovering from Coronavirus?
- What do these lowered forecasts reflect?
- Is the global economy on the road to recovery?
- How was the performance of industries and sectors during the recovery?
- How are the major economies doing?
Trading Post-Crisis: Chances and Opportunities
For a second, it seemed like the world would not have survived the dark times caused by a coronavirus and the crisis.
As we may see now, everything is stabilizing step by step, life goes on, and the market is filled with loads of opportunities to profit.
Let’s catch them all?
Still hesitating? First, get rid of any doubts — the situation is truly favorable for trading, especially when FBS supports you.
Second, read the article to find out what you should pay attention to. Then, go ahead.
Is the Global Economy recovering from Coronavirus?
From an economic point of view, the worst of COVID-19 has passed.
However, has the global economy really started recovering?
Yes, the economic recovery is beginning to take shape, but it is exceptionally uncertain and unclear.
The outlook is blurry, and forecasts don’t reflect reality, as we will see.
- The damage to the global economy this year will be less than previously expected; however, it will remain “unprecedented” in recent history, according to the Organization for Economic Cooperation and Development (OECD), in its latest report about global economic output in 2020. The outlook has improved slightly since June.
- The organization has upgraded its forecasts for the global economy to shrink from 6% to 4.5% in 2020. That may seem like a positive thing, but when we get a deeper look, you’ll find that it has also lowered its forecast for the economic growth in 2021 from 5.2% to 5%. That means the recovery road will be longer and harder, and the expected damage will be much deeper.
- The organization, which represents the world’s largest economies, also warned that headline figures hide huge discrepancies.
While it significantly raised its 2020 forecasts for the United States and China, and Europe but only slightly, it lowered the projections of developing countries such as Saudi Arabia, Mexico, Argentina, India, South Africa, and Indonesia.
What do these lowered forecasts reflect?
- The widespread and prolonged spread of the virus.
- High levels of poverty and unemployment.
- The possibility of continued lockdown measures for a longer period.
- The extent of long-term damage from the strength of the consequences of the pandemic.
The pressure is increasing in European countries, such as France, Britain, and Italy.
They may return to lockdown measures again, especially with increasing numbers of infections to higher levels than in May, and the beginning of the second wave as winter approaches.
The United States hasn’t controlled the pandemic yet, and it is still the first country in the world in terms of the numbers of infected people and the death toll.
Is the global economy on the road to recovery?
Sort of, with easing measures and massive monetary stimulus from governments, economies are starting to recover quickly.
It seems that the economic recovery has taken the shape of a letter (V), but it is still a very long way to return to pre-pandemic levels.
Governments, businesses, and services sectors are still at the mercy of social distancing measures and reducing employment and capacities to keep the coronavirus under control, so they don’t have to close again.
People remain afraid they will catch the disease, and it isn’t much different for companies that are afraid to invest in this turbulent atmosphere.
The uncertainty among people and companies is at an all-time high.
How was the performance of industries and sectors during the recovery?
Variation rules the situation! While some industries performed surprisingly well, others were tragic.
Let’s take the services and goods sectors as an example.
The goods sector has recovered at breakneck speed, once the economy and factories roared back.
Global retail sales returned to their pre-pandemic levels last July, according to JP Morgan.
Consumers around the world, who stockpiled anything that crosses their minds to prepare to stay at home all the time, helped in the recovery too, in addition to their new levels of obsession with e-commerce and online shopping.
On the other hand, the service sector, which is still far below its pre-pandemic level, is suffering because these industries depend on people who are currently avoiding crowds.
The number of diners in restaurants remains 30-40% lower than normal worldwide.
Also, the number of scheduled flights is about half what it was just before the pandemic struck.
How are the major economies doing?
The variation in economic performance between countries is even more striking.
China is the only country in the G20 that is expected to increase its GDP in 2020, with its economy growing by 1.8%, compared to a contraction of 3.8% in the US, and a decline of 7.9% among 19 countries that use the euro.
In the end, the outlook may be positive from the outside, but it carries with it negatives and crises worse than we expect.
Do not rush to judge or be happy before you understand what is going on around you in the global economy and compare with your eyes the reality.
We have not witnessed such a crisis, and an epidemic of the coronavirus, since World War II.
Of course, the recovery will not be easy.