GLOBAL ECONOMY

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Date of Publishing: November 2020.
No. of Pages: 16.

With the US election largely settled, Goldman Sachs Research has updated its global economic outlook. It is above consensus forecasts for growth in most major economies in 2021. At the most basic level, Goldman Sachs Research views the coronavirus recession as much more V-shaped than previous postwar cycles. Just as the global economy rebounded quickly (albeit partially) from the lockdowns in the spring, the expectation is for the current weakness to give way to much stronger growth when European lockdowns end and a vaccine becomes available. One important assumption underlying the forecast is that governments continue to do a reasonable job replacing private sector income lost in the disruption. In the United States, Goldman Sachs Research expects a $1 trillion stimulus package, potentially enacted before President-elect Joe Biden’s inauguration on January 20. While this is less than half of what might have been seen under a Democratic sweep in the election, it should suffice for a small positive fiscal impulse to US growth in coming quarters.

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Contents: 

1. GDP Forecast 2020 - 2022: Goldman Sachs vs. the Bloomberg.
2. A Small fiscal US stimulus ahead: Impact on Budget Deficit & Impact on HDP level. 
3. Sharp Rises in Hospitalizations and Infections following colder weather.
4. Renewed Partial Lockdowns in Europe and US.
5.Super-forecasters and Experts  Remain Constructive on Vaccine Outlook.
6. Frontline Healthcare Workers, Essential Workers and the Elderly Would Get Vaccine First.
7. A Larger Vaccine GDP Boost to the US and the Europe to China.
8. Limited Increases in Unemployment in Europe and Japan and Sharp Declines in North America. 
9. Surprisingly  Few Bankruptcies and  Elevated Business Formation.
10. Low inflation and Policy Rates in Coming Years.

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