在经历了强劲的锁定后追赶效应之后，预计2020年第4季度和2021年第1季度经济复苏将放缓，因为疏远措施再次收紧，持续的裁员将控制支出和投资。Euler Hermes has loweredour global GDP growth forecasts for 2021 to +4.6% (vs. +4.8% expected in June), following a contraction of -4.7% in 2020.
Q2 data has already confirmed diverging recovery paths, with China and its Asian trade partners, Germany and Brazil outpacing the rest of Western Europe and the United States. The sharpest trend reversals in activity should be visible starting in Q4 2020 in Europe (mainly Spain, France and the U.K.), the United States and in emerging markets such as Brazil and Mexico. In this context, the gradual phasing out of temporary policy measures designed to support companies will lead to a major trend reversal in business insolvencies, with a +31% increase expected by the end of 2021.
Meanwhile, a loss of purchasing power for the most fragile households will be hard to recover. The asymmetric exposure to job losses meant young, less qualified and part-time workers were hit the hardest, implying a K-shaped or “dual” recovery in consumer spending ahead.
Political Risk Could Be Back Like a Boomerang
The risk of policy mistakes for emerging markets that loosened their fiscal discipline to fight the crisis will rise in 2022: Anticipations of higher U.S. rates should materialize then and debt sustainability worries could trigger pressures on emerging market currencies.
Because of that, we still expect the equity market to underperform in 2020 and to start a muted rally in 2021. When it comes to corporate credit, both investment grade and high-yield corporate spreads look too tight. As in equities, corporate credit markets remain detached from fundamentals on the back of the central banks’ perpetual put option.
Lastly, with the short end of most developed countries’ sovereign yield curves anchored by their respective central banks, we expect a timid curve steepening toward the end of 2020 and 2021. This gradual increase in term premium will occur on the back of higher inflation expectations and a halt in the recent decline of real yields. On the other hand, long-term emerging market sovereign spreads look overbought.
Fiscal and Monetary Policy: The Devil Is in the Details
European Union member states agreed on issuing common debt to boost the recovery in a historical move. Yet the different natures and spending calendars of fiscal policies will matter: Countries focusing on (short-term) demand (Germany, U.S., China, etc.) could see a faster recovery than those betting on supply (France). Some countries still need to do more (Spain, Italy, the United Kingdom).
First, the fight for regional primacy will lead to a regular “weaponization” of technology, trade, currencies and payment systems. Second, the balance between the state and markets will change, to the disadvantage of the latter. And as the state gets more and more entangled in the private sector, market dynamics for innovation will get weaker while the number of zombie companies rises. Private players in social security — such as life insurers — might be pushed against the wall.
However, every cloud has a silver lining: COVID-19 has shown how quickly change is possible; it is a welcome break-up of encrusted structures and a boost to digitalization. The way we work has changed for good. Future work will see more remote working and flexible team structures but less business trips. Finally, it has also raised society’s risk awareness, including for low-probability, high-impact tail risks.
The upshot: More demand for and better pricing of risk cover. This should be a boon for insurers — if they are able to offer comprehensive and simple solutions.