Deputy Dean of the School of Management, Cranfield University in the United Kingdom (UK) and Professor of Global Economy, Joe Nellis, has said the the global economy has been saved from a depression on the back of huge fiscal stimulus disbursements by governments around the globe.
Speaking in a virtual public lecture on the topic Prospects for the Global Economy in the Aftermath of the Covid-19 Crisis, monitored by norvanreports, Professor Nellis noted that, the USA and the EU alone, have spent a combined $10 trillion in fiscal stimulus packages to tackle the adverse impacts of the pandemic on their economies.
Adding, the fiscal stimulus spent so far by world governments is the biggest in several decades.
According to Professor Nellis, had governments around the world notacted swiftly in managing the Covid-19 crisis, the global economy would have plunged into a deep depression – at least 2 years of continuous negative Gross Domestic Product (GDP) growth.
“Governments around the world have done everything possible to avoid a global depression, the USA and EU alone have already committed $10 trillion to fighting Covid-19 and enhancing recovery. Across the world, this is the biggest fiscal stimulus we’ve seen in our lifetime, governments are now spending to get us out of recession and if they had not, we would have been in a very deep depression, so a global depression has be avoided completely,” he stated.
Speaking further, he noted that most economies around the world on the back of a successful vaccination programme will experience a V-shaped economic recovery – a sharp rebound in economic growth after a sharp fall in economic growth.
Other countries will however, experience a U-shaped economic recovery with a few experiencing a W-shaped economic recovery – U-shaped recovery is a fall in economic growth followed by a prolonged recession after which economic growth bounces back whereas W-shaped economy is a double fall and double rise in economic growth.
On his outlook for the global economy, Professor Nellis, stated that there would be a strong positive global economic growth occasioned by the vaccine rollout and more fiscal stimulus packages by governments especially in major economies.
International trade he also mentioned, will grow by 8 per cent this year. The USA, Japan and other advanced economies he pointed out will return to end-2019 economic activity levels by the second quarter of 2021, for the UK and the EU region, that would be in 2022 or possibly 2023.
Global economy, as projected by the International Monetary Fund (IMF) is expected to rebound by 5.5 per cent in 2021 and 4.2 per cent in 2022.
