A different kind of global recovery: The global financial crisis vs. COVID-19

Mandatory and voluntary restrictions on economic activity to halt the spread of the global COVID-19 pandemic led to an unprecedented downturn in the global economy in the first half of 2020. Deep recessions in economic activity were widespread around the globe and occurred at roughly the same time. The Conference Board estimates the level of global GDP in 2020 to fall 4.7 percent below last year’s level, according to our latest Global Economic Outlook. This would be a far worse outcome than the contraction in global GDP during the global financial crisis (GFC) when the global economy contracted 0.9 percent from 2008 to 2009.

At the same time, we expect a much weaker rebound in annual growth rates than was the case in the aftermath of the GFC, primarily because of lower growth in emerging markets. Prior to the GFC, growth in these developing economies was accelerating rapidly as they caught up with more advanced ones. This helped them to quickly rebound from the crisis. More recently, however, these same economies have been undergoing a deceleration in economic growth because much of that “catch up” potential has been realized. We therefore anticipate that emerging markets will recover from this shock more slowly and will fail to help drive a rapid rebound in global economic growth.

Click here for more information on The Conference Board Global Economic Outlook.