Where are we in the global recovery process?
Mobility has been affected by the recent surge in covid cases. Footfall in public spaces has been plateauing since mid-June in both advanced and emerging economies. However, the rate of new daily covid cases worldwide is easing (to 1.3% d-o-d from 1.7% one month ago). Both advanced economies and emerging economies have contributed to these improvements.
Beyond these favourable developments at an aggregated level, some countries are still recording sustained daily growth rates (Germany 2.9%, Spain 2.5%). However, good news is coming from countries that have experienced cases spikes recently: Japan 1.6%, Australia 0.9%, Switzerland 1.0% are all slowing down from double-digit growth in mid-July. Heartening developments are also coming from the US: at 0.9% its daily growth rate is below many European countries. Moreover, critical US southern states exhibit rates below 1.6% and some are even in contraction. There are contrasting situations in emerging economies. On the one hand, some populous countries record a reduction in net cases: Russia -0.5%, Brazil -0.3%, Mexico -0.6%, South Africa -1.8%. Some critical states are recording very low daily growth rates: India 0.1%. On the other hand, some countries, notably in Latin America, are still recording sustained daily growth rates.
All in all, the situation is still far from being resolved but seems to be manageable. Even if the recent surge in new cases required stricter social distancing measures it is very unlikely that any country will again lock down its economy completely. Recent economic releases have tended to confirm that a recovery is clearly underway in the US, in China, and in Europe. On an aggregated level, industrial surveys are showing expansion again, manufacturing orders are encouraging, leading exporting countries tend to confirm that international trade is progressively recovering. All these developments tend to give comfort to our scenario that world real GDP growth is likely to be back in positive territory in Q3 and Q4 after the deep contractions recorded in Q1 and Q2 (an estimated cumulative -9.4% in H1 2020). Therefore, we revise upwards slightly our estimate of the 2020 world real GDP growth from -4.1% to -3.9%.