An interview with James Sweeney: The recession will reach its trough in June
The global recession could reach its trough soon. The second half of the year will likely see economic growth rebounding. However, investors must deal with a higher risk of deflation in the short term.
A slow recovery will follow the major recession
The coronavirus pandemic is making a huge impact the world over. Economies around the world were suddenly plunged into a major recession due to the shutdowns to combat the virus. In sum, global GDP is likely to contract by 3.5% in 2020.
However, there is good news too. "We expect to hit the trough in May or June," says James Sweeney, Chief Economist and Regional CIO Americas at Credit Suisse. However, any recovery will take a long time. When will global GDP finally return to pre-crisis levels? What influence does the crisis have on international trade relationships and globalization? Listen to the interview to find out.
The crisis will increase the risk of deflation in the short term
The question for investors now is whether the aid packages from governments and central banks will mean higher inflation in the future. However, the exact opposite is true in the short term, according to James Sweeney. "At the moment it's very clear that we have disinflationary pressures, and there's a risk it could turn into persistent deflation." Watch the video to learn when inflation rates are likely to recover, and why it is too early to forecast their long-term developments in more detail.