Please note: The Owl will be going on vacation for two weeks starting on Monday, July 20 and returning on Tuesday, August 4.

The latest forecast from The Economist Intelligence Unit entitled “A Q3 recovery, what Q3 recovery?” anticipates that it will take until 2022 before the global economy returns to pre-pandemic levels with the pace varying from country to country.

The forecast for Canada’s GDP is that it will be back to pre-pandemic levels by the fourth quarter of 2022. Japan’s GDP is not expected to reach this milestone until the fourth quarter of 2024.

The forecast, however, assumes that additional waves of the virus do not disrupt the recovery. The United States is a prime example: “Its economy should be back to pre-coronavirus GDP levels in 2022, highlighting the flexibility of its labour market. However, there are grave risks to this forecast, as many US states are re-imposing social distancing measures in an attempt to curb a recent rise in coronavirus cases.”

It’s also important to note that, however long it takes to get back to where things were in 2019, the growth that would have occurred over that period has been lost. In other words, we will be catching up to where we were, not to where we would have been had the pandemic not thrown a spanner into the economic works.

The report also cautions “that impressive rates of quarterly growth in July-September will not mean much” because they are relative to the extremely low base reached during the second quarter. “In fact, the output of G7 and BRICS* countries in the third quarter of this year will remain low, and in some cases at levels last recorded more than two decades ago.” (*Brazil, Russia, India, China and South Africa.)

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