Substantial upward revisions in the consensus GDP growth forecasts in the US and Switzerland. Partial expiry of fiscal stimulus measures dampens the pace of economic recovery in the UK and elsewhere. New Japanese prime minister likely to stick to predecessor’s economic policy
Chart of the month
The world economy has recovered since May. In the US and Switzerland, “peak pessimism” is clearly behind us, with consensus forecasts for 2020 GDP growth moving up and the gap to our own projections narrowing this month. It is becoming increasingly clear that Switzerland is getting away from the COVID-19 crisis with a black eye. Yet, the recession has a lasting impact and we think it is important to highlight that even Switzerland’s GDP will not return to its pre-crisis level before the final quarter 2021. In our base case scenario, GDP in Switzerland will fall three percentage points short of its underlying trend seen from 2010 until 2019. Welcome to the “97% economy”!