Double Dip Recession Imminent As Covid-19 Induced Economic Lockdowns Reintroduced
With Europe and North America experiencing a virulent second wave of the coronavirus pandemic, lockdowns of the economy are being reintroduced by sovereigns on an increasingly stringent basis. As an example, many regions in Spain are imposing enforced curfews.
The first wave of economic shutdowns sparked the worst economic contraction in many developed countries since the Great Depression of the 1930s, greatly surpassing the Global Financial Crisis of 2007-2009 in severity. A return to at least semi-normal economic activity facilitated a sharp statistical bump in economic growth. Now, another major contraction looms on the horizon.
Depending on the duration of the current wave of Covid-19 induced shutdowns, a double dip recession looks increasingly likely for many economies, both advanced and developing. A double-dip recession also raises the possibility that a global economic depression, already a strong possibility, becomes a virtual certainty.