Forecasts Q4 2020

Senior Economist
Portfolio Manager

Global Economic Outlook

  • While set for a contraction of -2.9% in 2020, we expect the global economy to rebound strongly to grow by 4.9% in 2021.
  • The eurozone appears poised to emerge from the COVID-19 crisis in better structural shape as the shock has driven greater transformative integration efforts than in earlier crises. 

Emerging Markets Outlook

  • COVID-19 may cause emerging markets economies to contract by about 1.5% this year, an extraordinarily weak historical
    performance but a little better than projections in June.
  • While EM growth will likely recover in 2021, any significant change to global supply chains as fallout from US-China relations may make future EM outperformance more challenging.

Global Capital Markets

  • With counterbalancing risk and rewards across most major macro issues, a heightened focus on relative value trade-offs within broad asset classes characterizes our current outlook.
  • Although pandemic uncertainty and the low level of interest rates have driven the corporate sector to lever up by issuing an avalanche of bonds, both investment grade and high yield bonds offer better prospects than government bonds.