Macroeconomic conditions

The coronavirus pandemic, which began in late 2019/early 2020, knocked the global economy off its expected growth course and plunged it into a deep recession in the year under review. The International Monetary Fund (IMF) estimates that global economic output contracted by 3.5 percent in 2020.

To limit the number of cases and avoid overloading healthcare systems, many governments worldwide imposed measures of varying intensity and duration, particularly in the first half of the year. These lockdowns led to extensive restrictions on economic activity. Consumer spending, investing activity, and companies’ production activities were significantly affected. The negative impact was felt internationally, taking its toll on global trade, financial markets, commodity markets, and supply chains.

Following its dramatic slump in the first half of the year, the global economy began to show early signs of recovery in the third quarter thanks to the easing of local lockdowns and the gradual restart of activity by companies that had faced restrictions. The extensive fiscal and monetary policy measures helped to contain the sharp drop in economic activity and global trade.

Infection rates began to rise again in some parts of the world in the fourth quarter, resulting in the tightening of restrictions to varying degrees depending on the region. In some areas, this put the brake on the economic recovery that had begun in the third quarter.

According to the IMF, the developed economies recorded a year-on-year contraction of 4.9 percent in 2020, with the eurozone among the areas worst affected. The decrease in the United States was less pronounced. According to the IMF, the emerging markets and developing countries saw their economic output decline by 2.4 percent. Having suffered a significant downturn in its growth as a result of the strict lockdown in the first few months of the year, China recovered over the course of the year – and is continuing to do so – due in part to government stimulus. By contrast, countries such as India and Brazil suffered a severe recession.

According to the IMF, the global volume of trade contracted by 9.6 percent year on year because of border closures and disruption to global supply chains.

Gross domestic product in 2020 real year-on-year change