Lockdowns predicted to take a heavy toll on GDP around the world

JOHANNESBURG – NKC African Economics has warned that global economic growth in the first half of 2020 would be even weaker than its zero percent forecast as more countries extend lockdowns, causing sharp falls in output at a global level.

NKC, a research think tank owned by Oxford Economics, said yesterday that the downturn would reflect broad-based revisions with evidence in China showing that prolonged lockdowns triggered by the spread of the coronavirus had larger adverse effects on activity.

Ben May, director of global macro research at Oxford Economics, said further lockdowns had been announced, most notably in some US states, India, Brazil, and Mexico, while other governments have also hinted at extending the duration of lockdowns since then.

May said the unprecedented rise in US jobless claims and reports that 500000 people in the UK had applied for universal credit had also added to the downside risks to growth.

“The growing number of shutdowns suggest that our forecast for 2020 global GDP growth of zero percent may now be too optimistic,” May said.