Just how different is the growth shock of 2020 to that of 2008? First of all, the contraction in the GDP of developed economies in 2008 was -4.2% while the expected contraction in 2020 is between -7% (IMFs) and -6% (private economists) for developed economies. The Covid-19 shock should therefore represent a little less than twice the shock from the 2008 crisis. It is also a shorter shock in time, as the 2008 recession lasted from December 2007 to June 2009 (i.e. 19 months). The Covid-19 crisis began in February and ended at the end of August, according to our World Growth Nowcaster, so it is a seven-month shock. The shock of 2020 is thus 50% larger than that of 2008 but will have lasted half as long. It’s a significant shock, but without being a true multiple of 2008.
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