How Miserable Is the Global Economy?

The Global Economy Plummeted

How miserable is the global economy? "This year the global economy is "probably" experiencing the worst recession since the Great Depression of 1930!" the chief economist of the IMF warned.

According to the latest data from the Asian Development Bank, the epidemic may cause the global GDP to evaporate by nearly US$347 billion (about NT$10.5 trillion). The United Nations has simultaneously warned that the epidemic may cause the loss of 25 million people worldwide, which is more serious than the 22 million people who lost their jobs in the 2008 financial tsunami.

As a result, governments of all countries are facing great enemies, and both fiscal and monetary policies are working together to save the economy. At present, the world has announced an expansion expenditure plan of more than 8 trillion US dollars, of which the US budget has reached 2.3 trillion US dollars, the EU has also prepared 2.2 trillion US dollars, and the Chinese quota It also reached RMB 3 trillion.

As for monetary policy, the Federal Reserve Bank of the United States (FED) among the global central banks has cut interest rates by 4 yards in mid-March. The federal benchmark interest rate level is only 0 to 0.25%. It also announced that it will start quantification of up to 700 billion U.S. dollars Loose measures.

But under the stimulation of silver bullets from all sides, can it save the global economy? The IMF (International Monetary Fund), which recently released its economic forecast, is not optimistic and has reduced its global GDP growth from 3.3% to "-3%" in one fell swoop. Well-known Nobel economics observations, the retaliatory rebound, and V-shaped reversal expected by everyone may not be easy. It is more likely to be a U-shaped reversal of Niubi recovery.

10 Economic Trends

1. 28 years, China's GDP first saw negative growth
   In mid-April, the China Bureau of Statistics released an economic forecast. China’s GDP for the first quarter of 2020 was negative for the first time, at -6.8%, a record low since 1992. Expectations for a "V-shaped rebound in the Chinese economy" fell short.
   As the world's second-largest economy, China still has the roles of "world factory" and "world market", and it is the main economy that has resumed operations after new pneumonia. Therefore, China's economic figures are the global economic recovery Wind direction ball. However, China's GDP turned negative for the first time in the first quarter, which has severely dampened the global economic outlook.
2. "Negative Oil Price" debuted, and oil futures once fell to "-37.63 USD"
   US West Texas Crude Oil once fell to a barrel of "-37.63 US dollars" in the futures session on April 20 (US time). This was the first record of "negative oil price" in history, triggering global panic and a stock market crash in various countries. But in fact, this is just gunfire caused by the trading rules, because the day is about to fall on the futures settlement day, but because long investors are optimistic about the price of oil will rebound, so the crude oil fund is deployed at a low price, but the oil price has not gone up. On the day of futures settlement, there were still a large number of open positions, which led to the embarrassment of the subsequent emergency sell-off but unacceptable trading, which caused the price of oil futures to collapse and turn to a negative number.
   Negative oil prices were short-lived, but, after the outbreak of January, the price of crude oil dived all the way. West Texas crude oil has fallen below $20 a barrel, and oil has entered the era of "one word." To save oil prices, OPEC+ (Organization of Petroleum Exporting Countries and its partners) has reached an agreement that 23 oil-producing countries, including the two major coffee producers in Saudi Arabia and Russia, will reduce production by nearly 10 million barrels of oil daily on May 1. But the global epidemic is not at an end. The industry is still not optimistic about whether the reduction in production will save oil prices.
3. The number of unemployed in the United States is breaking records, approaching the Great Depression
   The number of unemployed in the United States is breaking records, approaching the Great Depression
   In April, the unemployment rate surged to 20%, twice the economic recession in 2009, and it was close to the tragedy of the Great Depression of the 1930s.
4. Cliff fall! The U.S. PMI index fell sharply after the financial tsunami
   On April 23, the United States announced the April composite PMI index, which fell sharply from 40.9 in March to 27.4, the worst performance since October 2009. Besides, the U.S. manufacturing PMI for April was 36.9, which was lower than market expectations of 38.5; while the U.S. service, PMI for April reported 27.0, which was also lower than the market expectations of 32.5.
   From the above three PMI data, we can see that the United States is deeply affected by the epidemic, and the manufacturing industry frequently spreads layoffs and unpaid leave; coupled with the implementation of the social isolation policy, most people must work at home, attend classes, and the crowd of people eating and shopping on the street disappears, and the service The industry was hit hard.
   Economists at IHS Markit said that from the PMI data, it can be seen that the extent of the US recession in the second quarter will be more severe than during the financial tsunami.
5. U.S. stocks melted three times, the worst quarter in history
   2020 is a disaster year for US stocks, and the fuse mechanism was triggered on March 9, the first time in 23 years. I did not expect to trigger the fuse mechanism again on the 12th and 16th, setting a painful record for the third monthly fuse in the history of U.S. stocks in the first quarter of this year, it fell more than 20%.
6. The worst in history! European car sales plummeted by 50% in March
   During the epidemic prevention period, most countries implemented blockade measures, whether European or Japanese and Korean car manufacturers have ceased production, and most auto exhibition sales centers were closed, resulting in the largest decline in new car sales in Europe in March. According to the latest statistics of the European Automobile Manufacturers Association (ACEA) on April 24, the EU passenger car registrations in March decreased by 49.8% to 83,141 vehicles. Market estimates suggest that auto sales may not improve in April, exacerbating the potential for economic collapse.
   The other two major auto markets, the market predicts that the U.S. auto sales in 2020 will also be the worst in nearly a decade; China's auto market has also suffered a sharp decline, with new car sales plummeting 48.2% to 1.02 million units in March, and the winter is still long.
7. The most deserted in history! Peach-machine travel volume continues to explore new lows
   To prevent the epidemic, governments of all countries ban flights, restrict entry and exit and severely impact the aviation and tourism industries. The number of passengers at Taoyuan International Airport hit a new low. In March, the number of outbound and inbound passengers decreased by about 86% compared with last year. As a result of setting a single-day zero-entry record for the terminal on April 14, to reduce operating pressure, Taoyuan Airport has closed 20 boarding gates and internal waiting rooms from midnight on the 17th.
   As an important means of transportation outside the airport, the average daily traffic volume of the Airport MRT in April dropped by 82%, and the flow of people and money was greatly affected. Jijie currently applies to the Ministry of Economy for water and electricity fee subsidies and hopes that the central government will rescue the subsidies and relieve the operating pressure.
8. International trade is frozen, the BDI index fell 43% in the first quarter
   The epidemic has affected global demand and logistics, and international trade has been hit hard, leading to the continued downturn of the Baltic Dry Bulk Composite Index (BDI), especially in February when China closed its city. The BDI index once fell to more than 400 points, the lowest in recent years.
   BDI is currently the world's authoritative index for measuring the international shipping situation, and it is also a leading index reflecting the international trade situation. Due to the epidemic situation, the global implementation of crew entry control and bulk shipping demand has fallen, and it fell by 43% in the first quarter of this year. Although the BDI index is gradually recovering to 665 points, Esben Poulsson, chairman of the International Maritime Association (ICS), predicts that global container shipments may decrease by another 30% in the coming months.
9. The worst since the Great Depression! The IMF predicts a 3% decline in global GDP and 4% negative growth in Taiwan
   The IMF (International Monetary Fund) originally estimated that global growth in 2020 will be better than that in 2019 to 3.3%. However, with the spread of the new coronavirus and the discoloration of all pigs and sheep, the IMF estimates that the global economy will decline by 3% by 2020. At the same time, Taiwan's economic growth has been revised down to -4%.
   "This is a crisis unlike any other. This year the global economy is "probably" experiencing the worst recession since the Great Depression of 1930," said the chief economist of the IMF. The global economy will achieve a partial recovery in 2021, but still, It will be lower than the trend before the outbreak of new coronary pneumonia, and there is still considerable uncertainty about the resilience.
10. Taiwan's GDP is expected to be one! Taiwan Economics Institute predicts the bottom of the boom in the second quarter
    Compared with the IMF's pessimistic Taiwan economic growth, the Taiwan Economic Research Institute is relatively optimistic and still believes that Taiwan can maintain one, and expects the bottom to recover slowly in the second quarter and the second half of the year.
    According to the latest forecast of the Taiwan Economic Research Institute on April 24, the growth rate of domestic real GDP this year is 1.58%, down 1.09 percentage points from the January forecast. The Director of the Taiwan Academy of Economics, Zhang Jianyi, pointed out that Taiwan’s economic recovery will be somewhere between a V-shape and a U-shape, which is "recovery after a small base".
    The reason for the Taiwan Economic Research Institute’s optimism is that the epidemic in Europe and the United States has gradually slowed down, the financial market has been relatively stable, and the domestic epidemic prevention is appropriate. The government’s bailout plan will help demand rebound and will slow the impact of the epidemic on the economy.