Economic Snapshot for G7 Countries

July 3, 2020

Global economic growth to take a severe hit in 2020

The world economy will shrink this year at the sharpest rate in decades, as measures taken to contain Covid-19 severely restrain private consumption, investment, trade, and travel. Risks to the outlook are elevated, given uncertainty over the evolution of the pandemic—including the possibility of a second wave of infections—and the duration of social distancing restrictions.

Major Economies Monetary & Financial Sector News

Global price pressures are currently moderate due to low oil prices and weak demand, and these two factors will likely continue to keep inflation mild this year. That said, certain Latin American and Sub-Saharan African countries will still experience high inflation, amid currency weakness and the locust plague in Sub-Saharan Africa hitting food supply.

Over the last month, the ECB ramped up its asset purchase program by EUR 600 billion, the Bank of England boosted its asset purchase program by GBP 100 billion, while China’s Central Bank cut rates. Other major central banks stayed put. Going forward, global monetary conditions should remain highly accommodative.