Tough recovery for world economy: study

Research firm, IHS Markit predicts that the the world economy will shrink 5.5% this year, triple the damage it sustained in the 2008 financial crisis, and then struggle to regain traction. According to research, global growth will struggle to rebound from the lockdowns, travel restrictions and business closures meant to contain the pandemic.

“While growth in the hardest hit economies may snap back briefly, the momentum will soon fade,” the financial research firm warned. The study anticipates the U.S. economy to contract 7.3% this year and that of the 19 European countries that share the euro currency to recoil 8.6%.

This period will be peculiar for its a wave of business bankruptcies and cautious spending by consumers trying to repair their household finances and uneasy about resuming old habits that drive economic growth – shopping, eating out, booking vacations and going to movies.

While usually, economies normally bounce back rapidly – registering so-called V-shaped recoveries – from sudden shocks such as natural disasters; according to experts, any recovery is likely to be subdued until the virus has been tamed by a vaccine or effective treatments.