Goldman Sachs expects a ‘V’ shaped economic recovery for the global economy compared to what was previously expected. V-shaped recovery would be more achievable if the Covid-19 vaccine had been found.
Global stocks soared on Monday after Pfizer and BioNTech announced that their Covid-19 vaccine had recorded more than 90% effectiveness in preventing pandemics.
This forecast report was released after the U.S. presidential election victory won by Joe Biden. Both of these developments are believed to likely affect global growth forecasts. In a 2021 global economic outlook, published over the weekend, Goldman Sachs said it now expects fiscal package stimulus to be announced.
At the same time, apart from the outlook for economic growth, Goldman Sachs chief economist Jan Hatzius said there would be a new wave of Covid-19 for European and U.S. countries. This caused most European economies to re-implement partial curfews.
The Bank expects a global GDP contraction of 3.9% by 2020, slightly better than the 4% consensus, followed by a 6% expansion in 2021 (compared to the 5.2% consensus) and 4.6% in 2022 (compared to the 3.7% consensus).
In anticipation of the vaccine in January, economic growth will accelerate in the second quarter.
