November 12, 2020

The Forward View – Global: November 2020

After two steps forward, European lockdowns are a step back for the recovery.

Our podcast series to accompany the NAB Forward View – Global continues, giving you a 10 minute summary of our key forecasts this month.  To listen, just click the link below.



  • Events over the last month demonstrate that COVID-19 remains a major factor influencing the global economy. The resurgence of the virus in parts of the globe –and the re-introduction of COVID-19 restrictions –will weigh on activity, but positive news regarding the development of a vaccine has buoyed markets as it offers the hope of a faster recovery down the track.
  • Incoming GDP data confirm that there was a substantial, but incomplete, rebound in advanced economy (AE) activity in Q3, which has generally exceeded our expectations. However, a resurgence in COVID-19 cases across both Europe in particular, but also North America, will weigh on activity. In particular, Euro-zone and UK GDP is expected to decline in Q4 following the introduction of nationwide measures to contain COVID-19 (including strict lockdowns in some countries).
  • In contrast, economic conditions appear to be improving in Emerging Markets. Aggregate PMI measures show strengthening in both manufacturing and services in October. Stronger manufacturing conditions were driven by India, China and Brazil; however, neither India or Brazil have contained COVID-19, raising concerns around the sustainability of their recovery. China’s recovery continued in Q3 –with growth of 4.9% y/y, driven by heavy industry.
  • While volatile, financial and commodity markets held up in the face of the resurgence in COVID-19 in Europe and North America, before lifting following the US election and positive vaccine trial results. While major central bank policy room is constrained, they remain ready to add further stimulus –the expansion of the Bank of England’s QE program a recent example, and the ECB is likely to take a similar step soon.
  • We expect global GDP to decline by -3.9% in 2020, before rising by 6.1% in 2021. COVID-19 continues to spread and how authorities react to manage it remains a key risk to the outlook. Successful development and a speedy roll-out of a vaccine represents an upside risk.

For further details, please see The Forward View – Global November 2020