The World Economic Forum released a report last week outlining the views of some of its chief economists. It drew attention to the problems that await the global economy in the second half of 2020 after six tumultuous months in the grip of a pandemic and concluded that economies will need a little more time to recover.
PROTECTIONISM STILL THE BIGGEST THREAT
As you can remember, the most important issues we talked about in the pre-pandemic period were the trade wars between the U.S. and China and protectionist policies.
In several of my previous columns, I have stated that protectionist economic policies have become a threat to the global economy and obstacles to free trade increase the risks of conflict.
Similarly, Beata Javorcik, chief economist of the European Bank for Reconstruction and Development (EBRD), points that the biggest threat to the post-pandemic period is protectionist economic policies.
According to Javorcik, certain leaders risk isolating their economies further by relying on populist policies in order to save their economies, and it is worrying that the G20 has not yet taken any steps.
HOW WILL CONSUMER BEHAVIOR BE SHAPED?
According to Ludovic Subran, the chief economist of Allianz, the most pressing question that needs be answered for the second half of 2020 concerns the behavior of consumers.
According to Subran, the most important issue is when consumers will stop saving and start spending again. If this is not achieved, it will be impossible for many economies that have already come to a standstill to recover, and economic administrators whose tax revenues have fallen will have entered a more difficult period.
THERE’S A NEED FOR MORE SUSTAINABLE DEVELOPMENT
UBS's chief economist Paul Donovan pointed that one of the most important problems facing economies in the post-pandemic period will be related sustainable development.
The fact that many countries' economies have turned to daily policies since the pandemic struck and that the decisions taken are far from green policies prioritizing the environment all pose a great risk for sustainable development.
DEVELOPING ECONOMIES WILL STRUGGLE MORE
The Pandemic indiscriminately impacted all economies. However, emerging economies are struggling more and more due to their current structural problems. Drawing attention to this issue, Managing Director of the World Economic Forum Saadia Zahidi stated that developing economies should consider a different growth model. Zahidi said that this moment is crucial for the fourth industrial revolution (4IR), stressing the need for different policies in order for countries to make an Economic Leap.