/ world today news/ Frédéric Jeanbon, executive director of one of the largest investment funds in Europe – BNP Paribas Asset Management, believes that the “mother of all recessions” will occur in the world economy due to the coronavirus pandemic.
He told this to the Financial Times.
Jeanbon believes a rapid economic recovery is unlikely after the “very, very significant drop in activity in almost all countries around the world” caused by the pandemic.
The top manager questioned the possibility of the so-called V-shaped recovery after the crisis, in which there is a sharp decline, and then the same sharp rise. In most countries, according to Jeanbon, a slower, U-shaped scenario will follow.
According to Jeanbon, the “huge rally” in stock markets after the crash in March did not reflect the real situation in the economy, was too fast and did not take into account the risk of a second wave of coronavirus worldwide.
He believes that the emergence of an effective vaccine against the coronavirus will contribute to improving the economic forecast, but currently the virus continues to progress, especially in the United States, South America and Asia.
Achieving a sustainable recovery requires luck and “good behavior in the countries concerned”.
Only 14% of asset managers forecast a V-shaped economic recovery, according to a Bank of America survey in July.
According to 44% of respondents, it is necessary to wait for the U-shaped recovery. Another part recognizes a W-shaped scenario (rapid recovery, second decline and growth again).
According to the World Bank, the global economy due to the coronavirus pandemic will shrink by 5.2% in 2020, which will be the biggest slowdown since World War II. Russia’s GDP will shrink by 6%, according to the World Bank. The European Commission expects the current crisis to lead to the worst recession in Europe since the Great Depression.
Translation: V. Sergeev
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