September 10, 2020

The Forward View – Global: September 2020

Economic rebound in Q3, but signs that growth momentum is slowing.

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.



  • After massive falls in GDP in Q2 across the advanced economies (AEs), the latest indicators are pointing to a substantial, but incomplete, Q3 rebound. However, momentum appears to have eased through Q3. Similarly, surveys point to a strong rebound in EMs in Q3, however mobility data suggests there is still some way to go, with the ongoing COVID-19 spread presenting a risk.
  • Due to the large falls in activity in the first half of the year the global economy is projected to contract by 4.0% in 2020 (previously 3.8%) and then to grow by 6.3% (previously 5.9%) in 2021. For many countries a full recovery is expected to take an extended time.
  • Financial markets have continued to recover from the impact of the recession, although there has been a retreat in equities in recent days. Financial conditions improved for major advanced economies in August, in part due to policy efforts to keep markets functioning. How bank lending standards evolve is an issue to watch, with a tightening already evident in the US. While advanced economy banks now have limited policy room, emerging market central banks have continued to ease rates.
  • The spread of the virus remains a key risk, with some countries struggling to get it under control and others having experienced a resurgence. This has led to measures to counteract the virus being maintained or new actions taken. If this pattern keeps on being repeated not only will it disrupt the recovery but it will likely result in longer lasting damage to economies. Another key risk is around how authorities manage the unwinding of the large policy supports that were put in place, with uncertainty around US fiscal policy the most immediate concern.

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