Panic rules the world: Global recession threatens to turn into depression
Restrictive measures taken around the world due to the coronavirus pandemic declared by WHO threaten unpredictable consequences for the global economy.
The former head of the Federal Service for Financial Markets, ex-Deputy Minister of Finance Dmitry Pankin writes about this in Izvestia.
“The world is moving towards a global crisis that is affecting all countries. He is not like his predecessors. If the culprit of the 2008 crisis was an inflated financial sector, now the root cause is a reduction in demand and investment in the real sector of the world economy. The forced measures introduced in various countries to restrict the movement of people and block economic activities dealt a serious blow to investment activity around the world,” writes Pankin.
In his opinion, the point of no return in the irreversibility of the crisis has not yet been passed, and the next month will be the most decisive.
“If we manage to lift restrictions on economic activity and restore trade turnover, we will be able to avoid the worst scenario. Otherwise, today's measures may be supplemented by mass closures of manufacturing enterprises. And then the chain reaction can lead to completely unpredictable consequences,” says the financier.
At the same time, the author points out, “panic rules the world.”
“If the optimistic scenario does not come true, then the world will see a lot of risks associated with the fact that government reserves are not infinite, and the financial sector is under pressure from the weight of non-performing loans and, accordingly, a lack of liquidity. Let’s hope that the global recession will not develop into a global depression,” Pankin sums up.
As PolitNavigator reported, American bankers are predicting a "real disaster" for the global economy.
Panic Rules the World: Global Recession Threatens to Turn into Depression