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April 20, 2020

Economic outlook: 59 million jobs at risk in Europe – growth in Asia expected to stall

By Paul Dennis

20 April

The IMF has warned that the odds of global growth exceeding zero per cent this year are now negligible.

In its latest Global Financial Stability report it said: “All in all, the sharp tightening of global financial conditions since the Covid-19 outbreak—together with the dramatic deterioration in the economic outlook has shifted the one-year-ahead distribution of global growth massively to the left. This points to a significant increase in downside risks to growth and financial stability. There is now a 5% likelihood (an event that happens once every 20 years) that global growth will fall below -7.4% . For comparison, this threshold was above 2.6%in October 2019.”

The IMF’s Chang Yong Rhee warns that the impact of Covid-19 on the Asia-Pacific region will be “severe and unprecedented”.
“Growth in Asia is expected to stall at zero percent in 2020. This is the worst growth performance in almost 60 years, including during the Global Financial Crisis (4.7 percent) and the Asian Financial Crisis (1.3%). That said, Asia still looks to fare better than other regions in terms of activity.”

Meanwhile, management consultants McKinsey has issued a report on the impact of Covid-19 on employment and the steps companies and governments need to take to mitigate it: “Our analysis, based on occupation-level data, estimates that the Covid-19 crisis could leave up to 59 million jobs at risk in Europe—a staggering 26% of total employment in the 27 member countries of the European Union (EU-27), plus the United Kingdom (EU-28).

“While some companies may need to enter a long and difficult period of slow rebuilding, others might be able to find near-term opportunities, such as strategic moves, partnerships, innovation, and new ways of working and collaborating.”

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