CRU Global Economic Outlook: Month of Lockdown Lowers GDP by 2-3%

By CRU Chief Economist Jumana Saleheen and CRU Economist Ippolito Tarabini, from CRU’s Steel Sheet Products Market Outlook

Lockdowns continued into April. They resulted in a fall in activity, particularly in the hospitality, entertainment and travel sectors. Using estimates of the loss of output by sector, we find that one month of lockdown lowers the level of annual GDP by 2-3 percent and annual GDP growth by 2-3 percentage points. This has led us to lower our forecasts this month. There are large revisions to our U.S., Eurozone and India forecasts, but little change to China. World GDP is forecast to contract by 3 percent in 2020, and IP is expected to fall by 4.4 percent (both significantly larger falls than forecast last month). We expect a U-shaped recovery for the world economy and a strong bounce back in 2021, but not strong enough to recover the lost output of 2020.