Ian Bremmer, the highly regarded political scientist, has predicted a global depression in his most recent column in TIME. “The Next Global Depression Is Coming and Optimism Won’t Slow It Down,” read the morbidly-stated headline of his column. He bases his forecast on the global nature of the evolving economic crisis, and the severe impact of Covid-19 on economies that far surpasses what occurred during the Global Financial Crisis of 2007-09.
The column by Bremmer follows last week’s release of Q2 economic data in the United States, which revealed that quarterly GDP had contracted by a staggering 33%. Unemployment rates in not only the U.S. but in all major economies are at double digit rates, as Coronavirus induced lockdowns continue to destroy consumer and industrial demand.
Meanwhile, stock markets worldwide are soaring, including the Dow Jones, as delusional investors continue to believe in the phantom of a V-shaped recovery. However, a spike in Covid-19 infection rates following a temporary receding after the initial lockdowns, reveals that such optimistic thinking is totally illusory. The likelihood of a second wave of infection in the Fall, coinciding with a likely divisive presidential election in the United States, makes Ian Bremmer’s dire economic forecast the most likely future trajectory for the global economy.
Political scientist and noted global risk expert Ian Bremmer, who is president of the consultancy firm Eurasia Group, in a recent podcast indicated that in his view the world is now headed into a severe economic depression. He indicated in his podcast that while a uniform formal definition of an economic depression does not actually exist, the statistics of economic destruction emanating from the Covid-19 pandemic exceed the parameters of a recession.
Ian Bremmer pointed out in his podcast that a technical recession is defined as two quarters of consecutive negative economic growth. A depression would mirror the coronavirus pandemic in that it has far greater depth and duration than a normal event. The global health emergency generated b y Covid-19 has resulted in a level of economic shutdown and contraction throughout the world that far exceeds the formal definition of a technical recession.
Though there is resistance at the early stages of this new Global Economic Crisis to label it a depression, Bremmer points out that there was also hesitation towards labeling the coronavirus outbreak a pandemic in its early phases. The noted political scientist is convinced that we are entering the first new economic depression in nearly one hundred years. Ian Bremmer also believes the world of the 21st century is stronger financially and economically than was the case with the Great Depression of the 1930s. This is the only positive insight he offered, in what was otherwise a prediction of economic doom and gloom.