05 Feb 2020
Posted in Press Release
Several events in 2020 could threaten the socio-economic balance of the world
Even though the integration of the global economy was threatened in 2019, 2020 has started off on a slightly positive note. This is expected to be a year of recovery for the international economy following the severe policy uncertainty that prevailed in 2019.
Two significant events in early 2020, including the US and China signing the Phase One trade deal, and clarity on Brexit has helped elevate the global growth prospects in 2020. The International Monetary Fund (IMF) expects the global economy to grow by 3.3% in 2020 compared to 2.9% in 2019. However, several geopolitical and socio-economical risks exist that can affect the performance of global organizations. Hence, it is pivotal to take into account the major events scheduled in 2020 while planning for the year ahead.
GlobalData, a leading data and analytics company, has compiled a comprehensive calendar of major political events, central bank decision dates and global election dates scheduled for 2020:
Global health emergency declared by WHO
In January 2020, the World Health Organization (WHO) declared a global health emergency following the outbreak of the novel coronavirus in China, a deadly strain of virus that spreads through minimum human contact. Thousands of people have been affected and more than 400 deaths have been reported within a few weeks in China, as of February 4, 2020. As a result, most countries have placed strict restriction to and from China.
Kausani Basak, Economic Research Analyst at GlobalData says: “Production and business activity have been hit as several cities have been shut down in the country. The tourism sector is also expected to be massively hit in China. Due to China’s position as one of the largest economies of the world, the coronavirus will have strong macroeconomic consequences.”
Elections in major countries
The US is scheduled to hold its Presidential elections in November 2020 in which President Donald Trump is running for a re-election. The event is of paramount importance for the global economy and politics as it will decide the future course of foreign policy of the world’s largest economy. Other countries such as Hong Kong, Taiwan, South Korea, and Egypt are also expected to hold elections during the year.
Monetary policy expected to be conducive for growth
On the economic front, decisions of major central banks (BOJ and ECB) are set to play a crucial role in global prosperity, as they are expected to continue the expansionary monetary policy. The Fed is expected to hold the interest rates steady over the short term. These decisions are the key conductor of global capital movements and financial and macroeconomic health of emerging economies.
Environmental issues are expected to take center stage
Basak adds: “As concerns for climate change grows, leading organizations and governments are expected to take initiatives to save the planet by adopting more environment friendly policies. However, these policies are in direct conflict with industries such as oil and gas and mining and are expected to create major disruptions in these sectors over the long term.”
Overall, global growth in 2020 faces medium to high risk from factors such as-geopolitical conflict, rising nationalist sentiments in several countries, and rise in the frequency of natural calamities. As a result, many events scheduled for 2020 has potential to influence political and economic scenario over the long term.