Global GDP Expected to Lose 10%, $8 Trillion – Trustnodes

Global GDP Expected to Lose 10%, $8 Trillion


Global General Domestic Production (GDP) is estimated to fall by 10% this year based on a general economic shutdown for two months.

The biggest car manufacturer in the world, Volkswagen, is closing plants across Europe.

Apple is closing shops, Ikea too, some airports are closing, Boeing is reducing production, Audi, Ford and other car manufacturers are closing, public spaces, pubs, theaters, and other non essential venues are closing temporarily.

It’s 30% to 70% of economic activity that is closing for around two months, with the estimate being around 50% in general, while 30% might be more reasonable. Making it worse than 2008 even with the lower estimate of 30% lost production for two months.

From there the maths is easy. 100% of the GDP over one year of 12 months makes it 8,333% of GDP per month. Now half because everything is closed, or lower than half, for 2 months, makes it -10% of the GDP.

100/12 = 8,33. 8,333*0.5*2 makes it around 8% to 10% of the GDP lost in Europe and America and presumably every other country too.

The airline industry especially is in a terrible shape, while Italy might now see significant financial strain as they were verging on recession before the global shut down.

All countries are following the same approach to address the pandemic, but you’d think consumer societies like Europe and America might be hit worse because people won’t be going out consuming.

The US economy was doing very well before this hit, but government debt levels there were ballooning. Now the Trump administration is sparing no measure to cushion the blow, including the announced plan today to give $1,000 to every American.

The biggest bailout in history is now unfolding with America and Europe probably able to withstand it, but the economic situation might worsen considerably down below.

As in particular US, Europe, China, Russia, and Arabia, but also the rest, are all intertwined, all of their economies are expected to suffer.

Russia and Arabia are dependent on oil exports for their economies. Oil of course has crashed because people are not flying anymore, or going on cruises, or even going out save for work. So these two regions might even see the worst blow.

China is dependent on Europe and America in particular for their exports, but people will now probably be buying less.

Europe and America are dependent on the consumer, who isn’t consuming, but on the other hand these are knowledge economies, more in offices sitting on a computer rather than out in factories.

So Europeans and Americans might find it easier to work from home and continue producing, but a steep recession is now probable, hopefully with a quick bounce.


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