Foreign Economic Expert: "COVID-19 Impact Lasts an Average of 16 Months... Global U-Shaped Recovery Expected"

KIEP Survey for External Economic Experts

[Sejong=Asia Economy Reporter Joo Sang-don] Domestic external economic experts predicted that the impact of the novel coronavirus infection (COVID-19) on the global economy will last for 16 months, and the subsequent recovery is likely to follow a 'U-shaped' pattern.

On the 12th, the Korea Institute for International Economic Policy (KIEP) released the results of a survey conducted among external economic experts reflecting this view.

KIEP conducted a survey from the 29th of last month to the 6th of this month targeting 58 external economic experts on ▲the global economy ▲the impact of COVID-19 ▲urgent policy tasks ▲and oil prices.

Regarding the time it will take for the global economy to return to its original growth trajectory and consumption and investment sentiment prior to the virus outbreak, experts estimated an average of 16 months. Specifically, 12 months (12 experts), 24 months (10 experts), and 18 months (8 experts) were the most common responses.

As for the future growth trajectory of the global economy, 67.2% (39 experts) responded that it would be 'U-shaped.' This means that the global economy will be fundamentally affected in terms of industry and economic structure, with the shock lasting relatively long, followed by structural adjustments, and then a return to the previous growth path. Ten experts (17.2%) expected a 'V-shaped' recovery, where the economy grows rapidly and quickly returns to the previous growth path after the end of the COVID-19 outbreak. Six experts (10.3%) forecasted an 'L-shaped' recovery, where the economy maintains a low growth rate for a long period even after the end of the outbreak and then gradually recovers.

Among the external economic experts who participated in the survey, 17 predicted the global economic growth rate for 2020 to be between '-3% and -2%'. This was followed by -4% to -3% (12 experts), -5% to -4% (7 experts), and -2% to -1% (7 experts). The majority of respondents forecasted negative growth for the global economy.

Experts identified the most urgent and important policy tasks for global economic recovery as ▲health and quarantine policies ▲expansion of government spending ▲monetary policy and liquidity expansion ▲and international cooperation, in that order.

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