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26th May 2020 The Second Wave Is Often The Biggest Killer

Going back centuries we can see that it is often the second wave of infections that kill more people than the first hit of the pandemic. While some countries are getting to grips with the Covid19 pandemic others have yet to feel the full force of the new deadly virus.

The game changer will be a vaccine but without that most countries will experience second third or more waves of Covid19. How big these waves impact will depend on learning the lessons from the first wave and not repeating the same or similar mistakes.

A large second wave of the virus with run away exponential spreading that forces reinforcement of social and economic lockdown would be catastrophic. The reproduction rate in countries where the virus is under control must be kept below 1. Countries which do not have the virus under control need to be quarantined to prevent them spreading the virus back into controlled country environments.

Even without a second wave of deaths the first wave tsunami economic wave may hurt localised areas whole continents and the world:

  • Some countries will not be able to pay their debts built up prior to pandemic or during the pandemic.
  • The eurozone and wider European union could implode from within. Alternatively some weaker countries may be forced to leave for the sake of survival of the rest as a homogeneous economic unit.
  • Systemic banking collapse could yet occur. Italian Indian and Chinese banks are particularly weak. However unknown weaknesses in other national banking systems could be the first domino to fall.
  • Corporate entities soaked in debt may have to close creating bad debt others may struggle to cope with.
  • Commercial and private valuations will in the short term be overpriced. Investments which have such assets are also overpriced. If there is not a V-shaped recovery in the economy then in the medium term this could create an unstable finance sector that could be a lot more damaging than lost revenue for a few months.
  • The political fundamentals could change when people react to the dawning that not only have thousands of people died but their financial futures are ruined for decades or perhaps lifetimes. Russia Brazil and India could presently be smoldering in embers of political change which could affect oil prices and the global economy.

Most of all debt was a problem for many countries prior to pandemic. With the pandemic debt has been posted as the saviour. It could become a bigger killer than the virus.

14th April 2020 International Monetary Fund IMF Reports The Global Economy Shrinking 3 Percent Due To The Coronavirus Pandemic

The IMF had forecast a growth of 3.5 percent for the the global economy pre pandemic. This means the IMF is forecasting a 6.5 percent swing from growth to global recession.

The financial crisis in 2009 only saw a global recession of 0.1 percent. This economic and financial crisis is 30 times worse than 2009 financial crisis. Next year the IMF expects a massive bounce back to global economic growth. Not all businesses will survive to see it.

23rd March 2020 Global Recession Due To Coronavirus COVID19 Pandemic Is Guaranteed

The only uncertainty is whether the global economy will deteriorate so much that a long term global economic depression happens.

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20th January 2020 International Monetary Fund IMF Cuts Global Growth Forecasts 2020 and 2021

The IMF is now forecasting global growth of 3.3 percent in 2020 and 3.4 percent in 2021. Risks to the global economy include:

  • High levels of inequality within countries and between countries
  • The rapid development of 4th industrial revolution technology threatening unemployment rises
  • High geopolitical risks and trade wars
  • Financial meltdown due to very high levels of debt

The IMF can see signs that some risks are stabilising but still significant threat to global growth.

9th January 2020 Now The Iran USA Immediate Threat Of War Is Dissipating The Global Economic Threat Returns To International Trade Wars

The signs are that both USA and Iran can agree to disagree again within killing thousands of people. The biggest threat to the global economy is the trade wars around the world particularly USA China trade war. Even this threat appears to be unwinding in its severity especially if they can do a partial deal soon.

If America and China can do a trade deal sign it and implement it the global economy can expand aggressively. It will be like the cork in a bottle of champagne.

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Until then and in addition to such a trade deal governments around the world need to invest heavily in infrastructure to support the global economy and prepare for rapid expansion 2021 onwards.

20th December 2019 Global Equity Funds and UK Equity Funds Win Billions Of Pounds Of New Extra Investment Money

Bank of America Global has reported that new money has flooded into investments following the USA China trade agreement. Equity funds in the UK have seen billions of pounds invested since the election of the most powerful UK government in decades.

Brexit uncertainty in terms of whether the UK will leave the European Union EU has been removed. The UK will leave the EU but how remains uncertainty. The UK will leave at the end of January 2020. The UK will transition during the rest of 2020 and either leave with a free trade agreement or leave with no trade deal agreed.

UK equity funds have also been pumped up with billions of pounds of new money as investors feel more reassured about the UKs direction of travel.

The USA economy is looking healthier not just with a trade agreement with China but also by the USAs ability to create more jobs and its super low unemployment rate.

21st November 2019 Global Economy Weakest Since Financial Crisis In 2008 According To OECD

The global economy is forecast to grow by a decade low of just 2.9 percent in 2019 and 2020 according to the Organisation for Economic Cooperation and Development OECD in its Economic Outlook.

The OECD is also forecasting that this weakness in the global economy is likely to continue beyond 2020 for foreseeable future in a large part due to the trade war between China and USA. In addition the OECD suggests that these countries will also suffer economic slowdown due to their own trade war.

The OECD predicts the European Union EU will continue to suffer poor economic growth levels and that its own Quantitative Easing QE measures will not save it. Each country in the EU needs to invest significantly in infrastructure and other areas of economy to spur faster growth.

The OECD projects UK growth of 1.2 percent in 2019 and 1.0 percent in 2020.

18th October 2019 Weakest Global Economy Since Financial Crisis 2008

International Monetary Fund IMF says global economy weakest since the start of the last financial crisis.

However the global economy is in a worse place now than the start of the last financial crisis. Central banks around the world back in 2008 2009 could dramatically cut interest rates to support businesses in significant debt and encourage new investment. There is very little room or no room for central banks around the world to cut interest rates.

In short the global economy is in a very high risk zone with few tools to protect itself. One way the global economy can navigate further distress is to resolve and settle all global trade wars and trade more freely.

15th October 2019 International Monetary Fund IMF Says Global Growth Slipping and Could Get Much Worse If Trade Wars Continue

The trade war between USA and China will cut global economic growth in 2019. It is forecast by IMF to be slowest since financial crisis in 2008.

Latest IMF World Economic Outlook projections for 2019 GDP growth reduced to 3.0 percent down from 3.2 percent in July forecast.

IMF

If the international trade disputes continue or worsen then there could be a spiral into a global recession as central banks around the world have fewer tools to protect their economies. Interest rates have already been slashed and quantitative easing or other forms of cheap money are already being deployed.

9th October 2019 Asia and Africa Are The Business Growth Zones To Focus On

Even though China is in middle of trade war with USA the rest of Asia is expanding rapidly. Growth in Asia is not as fast but compared to Europe many countries in Asia are growing around 5 times as fast with the exception of Hong Kong.

Several African countries are still growing extremely fast despite the global economic slowdown. Those that are not have massive growth potential over the next decades.

There is a global economic slowdown. A global recession is perhaps on its way if the trade wars continue. However there are parts of the world that remain in massive growth phase. Many are exporters but that does not mean its impossible to export to Asia and Africa. The low currency in the UK creates a massive opportunity for quality goods and services to be sold in Asia and Africa.

1st October 2019 Fear Of Lack Of Government Fiscal Control Is Biggest Risk Facing Businesses Around the World

The risk of a fiscal crisis is the biggest threat to business globally according to a survey from World Economic Forum.

However the biggest risk everyone can agree on is fiscal risk for governments overextending themselves which will eventually snap back to punish future generations.

Governments around the world are being partially protection by low interest rates and quantitative easing QE or cheap fake money.

As the UK cheers the end of austerity with both key political partys pledging to spend spend spend we should maybe consider the effects of UK governments excessively borrowing to spend.

Many economists are comfortable with borrowing to invest in infrastructure improvements especially when money is so cheap right now. This creates wealth in future that can payoff previous borrowing.

However borrowing more to cover in effect just daily government expenditure is very dangerous as eventually you will not be able to borrow still have same expenditure but will have a massive outstanding debt hangover that needs paying off.

The UK and USA seem to think that they can run up huge borrowing bill now. Lets hope they are right. Businesses fear they could be wrong.

4th September 2019 Expert Analysis Of Global Economy Argues The Global Economy Is Contracting Rapidly

UBS bank slashed its forecasts for world growth. The global trade war is biting harder than they thought. UBS reckons central banks around the world will have to cut interest rates to protect economic growth prevent recessions or pull some economies out of recession.

World economic growth will not be 3.2 percent as previously forecast but just 2.5 percent

UBS

1st September 2019 Tit For Tat Tariffs From USA and China Will Drag Global Economy Down Further

The USA has imposed 15 percent tariffs on Chinese imported goods from today. In total America has imposed tariffs on around 150 billion dollars of Chinese imports and has plans to impose tariffs on 300 billion dollars worth by end of 2019. The original plan was for 10 percent tariff but this has been increased to 15 percent by USA.

China has imposed 5 percent tariffs on US crude oil. In total China has imposed tariffs on around 100 billion dollars of American imports.

5th August 2019 USA Plans Additional Tariffs On China Creating More Concern About Global Slowdown 

Donald Trump plans to add tariffs to more Chinese imports. The escalating trade war between USA and China is creating havoc in the global economy. Many central banks around the world have lowered interest rates to try to support business leaders investments. However more tariffs means more global pain until America and China can agree a mutually beneficial compromise.

Donald Trump plans 10% tariffs on 300 billion dollars of current Chinese imports into USA as from 1st September 2019

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Only a new trade agreement will stop the a degeneration of the global economic climate. The tit for tat trade war with USA and China is affecting the whole world but is also hurting both China and USA too.

6th March 2019 OECD Cut Forecasts Global Economy In 2019 And 2020

The OECD has already downgraded global economic growth forecasts in November 2018.

International trade disputes around the world and uncertainty over Brexit will reduce world trading and lower business growth according to OECD.

The Organisation for Economic CoOperation and Development OECD forecasts world economic growth of 3.3 percent in 2019 and 3.4 percent in 2020.

25th February 2019 Hopes Rise For More Global Trade

President Trump has decided to delay raising tariffs on Chinese goods. This has encouraged a brighter outlook on global trade. Hopes are rising that America and China will agree a trade deal which will support an increase in global trade.

9th January 2019 World Bank Forecasting 2.9 Percent Global Economic Growth For 2019

The World Banks assessment of global risks in 2019 has led it to conclude the global economy will continue to slow in 2019 and 2020. Global economic growth in 2020 has been pitched at 2.8 percent.

Risk factors include

  • Trade war between China and USA
  • Brexit risk damaging UK growth and European Union EU growth
  • Some emerging markets may fail to fulfil potential growth opportunities

2nd January 2019 Slower Global Economic Growth In 2019

Global economic growth will slow if the hangover from 2018 continues in 2019.

  • Political risks on the downside threaten the fluidity of global trade which will slow economic growth. Trade tensions between USA and China and USA and Europe top the list of political risks in 2019.
  • Less money sloshing about in the global economy will slow global economic growth. Examples include the Eurozone closing the cash flow taps with the end of quantitative easing QE by European Central Bank ECB. In addition and perhaps more significantly the Federal Reserve in USA seem intent on continuing to increase interest rates in America which will make money a lot more expensive thus negatively impacting on economic growth in USA.
  • Businesses across the globe will find it harder to make a profit in 2019 and this will reduce sovereign state income from taxation and reduce corporate free money available for investment in future which will hit global economic growth.

On the upside could be lower energy costs from the continued oversupply of oil to the marketplace suppressing the price of oil and products made from oil.

In addition if political risks ease or reverse the global economy could actually receive a boost. For example there are indications that China is prepared to do a deal with USA. If this happens then 2019 could become a lot more positive.

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14th December 2018 Weak China and Europe Economic Data Reported

Worries of continuing global economic slowdown spread to stock markets around the world.

The Euro zone economy is expanding at slowest pace in over four years due to global trade restrictions and particularly poor economic performance in France.

  • French business activity fell rapidly this month due to violent anti government protests.
  • Germanys private sector expansion slowed to a four year low
  • China  November retail sales grew at the weakest pace since 2003 and industrial output rose the least in nearly three years due to trade dispute with USA.

The European Union EU has not thrown UK Prime Minister a bone to help her get her Brexit deal through UK parliament. This indicates it is highly likely she will have to pivot but to what?

21st November 2018 Trade Disputes and Higher Central Bank Interest Rates Are Slowing Global Economy

On the positive side there are currently no signs of a sharp economic downturn according to the Organisation for Economic Cooperation and Development OECD.

The OECD is currently forecasting that global growth would slow from 3.7 percent this year to 3.5 percent in 2019 and 2020. It had previously projected 3.7 percent for 2019.

13th November 2018 Global Growth Is Slowing

According to the International Monetary Fund IMF a number of the bigger economies are slowing and they could suddenly contract should there be a major risk event.

Key global growth risk factors include

  • USA China trade war could increase costs globally.
  • Higher energy costs. Oil prices have increased by more than 60 percent in two years.
  • Certain higher USA interest rates are on their way but how will this impact on global consumption?
  • Higher USA interest rates will strengthen the dollar the worlds currency of choice. How will a significant strengthening impact on global growth.
  • Parts of the world are still trying to recover from the global financial crisis including Italys banks and sovereign debt. A collapse of the banking system in Italy would reverberate around the world. Greece can be bailed out Italy can not.

Global growth for 2018 to 2019 to remain at its 2017 level of 3.7 percent but the growth outlook for a number of major economies has been marked down.

International Monetary Fund IMF

17th April 2018 Global Economic Growth 3.5 Percent

Institute of International Finance IIF forecasting faster global economic growth. IIF increased global economic growth for 2018 to 3.5 percent. Much of the increase in growth down to USA tax cuts. These will not only power USA growth but global growth.

16th March 2018 Global Growth Strongest In 7 Years

According to the Organisation for Economic Cooperation and Development OECD global economic growth is growing faster than at any other time in last 7 years. It is forecasting economic growth at 3.9 percent for 2018.

Threats to global economic growth include growing trade war between most other countries and USA as well as other geopolitical issues like Russia v EU / UK, North Korea and the ever present tensions in Middle East.

14th March 2018 A Credit Rating Agency Fitch Has Suggested Global Economic Growth Is Strong and Accelerating

Global economic growth is rising faster now than it has for around a decade.

Unemployment is falling, money is still cheap in most parts of the world and corporate investment is strong.

Fitch is forecasting global economic growth of 3.3 percent in 2018 and 3.2 percent in 2019. Last year it was 3.2 percent according to Fitch.

27th February 2018 You Should Be Optimistic About Your Future

Global growth prospects for 2018-19 are improving and accelerating. Most parts of the world are looking to a better 2018 than 2017 in terms of economic growth and 2017 was one of the best year’s for growth in close to a decade.

Not every business will take advantage of increasing global economic growth, just like not all businesses went bust during the financial crisis starting in 2007 to 2008. The rising tide of business opportunities creates the environment for your business to grow much faster in 2018.

Corporate business leaders in UK who look for new business development opportunities will find them.

If you do not think you have time to explore business growth opportunities, you may get the opportunity to reflect at your leisure after your business collapses.   Those companies that fail to grow may find they contract or even fail to survive.

7th February 2018 International Monetary Fund Chief Economist Says Global Economy Growing Faster

The IMF’s chief economist is reported as saying that world economic fundamentals are strong. There is increased trading and more business investment. As a result major economies are the world are growing faster than expected. He sees very broad-based global growth.

2nd February 2018 BusinessRiskTV Forecasts The Economic Forecasts Will Get Global Growth Wrong For 2018

Many economists are forecasting around the 4 percent mark for global economic growth in 2018. BusinessRiskTV forecasts this will underplay the global economic boom that is set to happen in 2018.

If a major global event occurs like World War 111 then growth will be slower but if World War 3 happens we will not care about economic forecasts any longer! Such geopolitical risk events aside we can look around the world and see great news unfolding:

  • America is feeding in huge corporate and personal tax cuts into its economy.   When America grows so does the rest of the world.   In addition, low unemployment and faster wage increases in USA will turbo-charge the USA economy in 2018.
  • Eurozone is experiencing is fastest growth period in around a decade and this will continue, but accelerate in 2018, as people find jobs and property values start to rise making people in the Eurozone feel wealthier.   Manufacturing is returning to countries in Eurozone that may have once have forgotten how to make things.
  • Africa is a sleeping giant that will fail to get its act together in 2018 but will improve on recent economic performance.
  • Asia Pacific is set to expand faster with the likes of India in particular racing ahead.   China will continue to find more and more people jobs in 2018 and will lift more people out of poverty further increasing demand for domestic and international consumption.   Japan will finally put decades of deflation behind it and new technology will begin to overcome demographic time-bomb to the benefit of Japanese economy.
  • The Americas, and Brazil in particular, was once a fast growing area of the globe. South American expenditure will be healthier in 2018 and help develop continental and global growth faster than 2017.
  • The UK is constantly put down by people in the UK but the UK economy will continue to surprise most UK economists trying to subvert Brexit and grow faster than 2 percent in 2018.   Low unemployment, faster wage growth due to skills shortages and rising housing prices will encourage UK consumers to spend more and manufacturing and services sectors will push UK growth faster supported by a return of the construction sector.
  • Middle Eastern countries will benefit from rising oil prices and rebuilding of some physically damaged countries.

We’ll look back on 2018 as the real start of the 4th Industrial Revolution as many new developments will turn into fast growing businesses and global productivity will start to increase overcoming the bad old days of doing business.

8th January 2018 Global Economy Forecasts: Increasingly More Positive Business Outlook

Previously poorly performing eurozone helping to drive more upbeat global economic outlook.

A survey for Sentix index indicated eurozone business leader confidence is at its highest level since August 2007. The global economy in all regions is looking more positive.

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