24 July 2020

Latest ISA GDP Growth Forecasts for 2020 and 2021

ISA has revised its forecast for global economic growth downwards to 5.4% in 2020, which would be the worst performance by the global economy since the Second World War. In fact, it will be just the second year since the 1940s in which global economic output will shrink (global GDP fell by 0.1% in 2009).

No region’s economy will be hit harder by the coronavirus pandemic than Europe. While Europe was forecast to fall into a recession prior to the pandemic, the region’s dependence upon exports and tourism, and its dearth of high-tech and high-growth industries, leave it particularly exposed to the worst effects of the crisis. In fact, three large economies in Europe (France, Italy and Spain) will see GDP contract by more than 10% in 2020.

Latin America will also suffer major declines in economic output this year.  Each of the region’s three largest economies (Brazil, Mexico and Argentina) will see their economies contract by at least 8% in 2020, and the potential for future downwards forecast revisions in this region remains significant.

North America’s economy is forecast to shrink by a little more than 6% this year, with the continued spread of the coronavirus across high-growth areas of the United States threatening to lead to an even-larger-than-expected decline in GDP in the world’s largest economy.

China is forecast to still generate a little economic growth this year (the only large economy to do so), but further outbreaks in that country could push its annual GDP forecast into negative territory. India, in contrast, is already there, with that country’s economy forecast to shrink by nearly 5% this year.