Is The World Economy Threatened By Another Coronavirus Recession?

Posted: Nov 10, 2020 1:02 PM
Is The World Economy Threatened By Another Coronavirus Recession?

Source: AP Photo/Gregory Bull

If it weren't for the skyrocketing spread of new COVID-19 cases in Europe and to lesser extents elsewhere around the globe, we would be happy to confirm the world's economy has begun to rebound from the coronavirus pandemic.

That's because we have tangible proof in the form of measurements of the concentration of atmospheric carbon dioxide measured monthly at the remote Mauna Loa Observatory. In October 2020, for the first time since the global coronavirus pandemic originated in China at the end of 2019, the rate at which CO2 is accumulating in the Earth's atmosphere increased instead of decreased.

You can see the uptick for yourself in this chart showing the trailing twelve month average of the year-over-year change of the atmospheric concentration of carbon dioxide against a backdrop of the timing of major world economic events since January 1960.

The uptick confirms September 2020 as a bottom for the loss of GDP from the world's economy during the first phase of the SARS-CoV-2 coronavirus pandemic, with the estimated loss totaling $12 trillion U.S. dollars.

Unfortunately, the negative economic impact to the world from COVID-19 is not over yet. The soaring spread of the deadly infection within Europe, where many nationalized health systems lack sufficient capacity to cope with the growing number of hospitalizations in part because of their governments' chronic underinvestment in health care infrastructure and resources, means they can only cope by imposing new rounds of lockdowns on their populations.

The resulting closure of businesses combined with mandates for residents to stay at home will either slow growth or drive additional losses in the world's GDP. The extent to which other regions around the world replicate the measures that crushed GDP growth in the first phase of the pandemic will determine which of these scenarios will apply.

Previously on Political Calculations

Here is our series quantifying the negative impact of the coronavirus pandemic on the Earth's economy, presented in reverse chronological order.