Of course it’s the worst data ever. What did you expect?

Posted by: Paul Donovan

17 Apr 2020
  • Chinese first quarter GDP fell 9.8% from the previous quarter. The forecast range was +0.6% to -15.8%, so it was within the range. ("Consensus" seems meaningless with ranges like that). It fell 6.8% over the year. Data suggests China's economy is operating below normal levels, but did improve at the end of the quarter.
  • Lessons for the rest of the world are limited, given differences in lockdown policies and economic structures. There may be a signal that extreme pessimism in forecasts is not justified. Media have rushed to point out this is the worst data in history. This is the first global lockdown in history – what did the media expect?
  • French President Macron is urging a common euro bond to fund post-virus recovery according to need rather than economic size. The suggestion is that this is needed to save the euro. (The US monetary union was revived after its 1932 collapse by collective fiscal action driven by need rather than a state's size).
  • The UK lockdown will be extended by three weeks. Switzerland will allow its citizens to have haircuts (a relief for people who have video conference calls with Swiss colleagues). US President Trump unveiled guidelines for the states regarding reopening.

Explore more CIO Daily Updates