[Global Insight] Will businesses, workers suffer for years after COVID-19?

“코로나 이후 경제 U자 회복…3년 걸린 9•11과 비슷”

The IMF has declared a global recession, as the world economy remains paralyzed by the COVID-19 pandemic which has sparked a sharp and sudden decline in demand and output and millions of job losses.
It’s hard to predict how long the lockdowns will last, or the time it will take to recover with some analysts like McKinsey saying it could take up to three years for the U.S. alone.
But to discuss what’s needed to help us prepare for the unknown,… we have joining us today Dr. Larry Samuelson, Professor of Economics at Yale University. We’re also joined by Dr. Graham Ong-Webb, a Fellow at Singapore’s Nanyang Technological University.

1. (To Dr. Larry) Analysts are predicting a near zero growth rate for the global economy this year. Projections for China have been slashed to the two percentage range. What do these downgraded projections tell us about the possible pace of recovery?
2. (To Dr. Ong-Webb) The airline industry is one of sectors directly hit by the pandemic. The International Air Transport Association says airlines may burn through 61 billion dollars of their cash reserves during the second quarter of this year,… and post a quarterly net loss of $39bn. That’s a 71 percent drop. The crisis has also worsened existing challenges and vulnerabilities in the aerospace and automotive industries. Will these sectors be able to survive, even with massive bailouts? How vital are they to restoring our economies?
3. (To Dr. Larry) So far the biggest stimulus plans we’ve seen amount to around 10 percent of GDP. But some say, we’re facing a situation worse than the Great Depression when global Gross Domestic Product fell by 15 percent between 1929 and 1932. Is the current level of spending enough?
4. (To Dr. Ong -ebb) Current policies will inevitably leave parts of the corporate sector with even larger debt burdens. Could this lead to a protracted recession and additional layoffs that last well beyond the virus?
5.Should we be thinking of provisions for future debt restructuring?
6. We keep hearing about the need for a global coordination in policy – even a global Marshall Plan. What would this entail?
That’s all we have time for today. Thank you for joining us Dr. Larry Samuelson, Professor of Economics at Yale University and Dr. Graham Ong-Webb, a Fellow at Singapore’s Nanyang Technological University.