Morgan Stanley has revised down its GDP growth forecast for the European Union and is now predicting an 11.8% contraction in 2020.
The US investment bank said: “In particular, the lockdown has been longer and tougher in France, Italy and Spain than in Germany, and these are also economies with a high share of tourism and therefore more exposed.”
Fitch Ratings has revised down its economic growth forecast for India to 0.8% for the fiscal year to March 2021 (down from growth of 5.6% predicted pre Covid-19).
The ratings agency said: “Risks to the medium-term economic outlook will increase if India experiences another bout of stress in its financial system.
“The current slowdown will reverse at least some of the improvement of the past few years in banking-sector health.
“Prolonged financial-sector weakness could weigh on credit growth, economic output, investment and productivity.”
Adnan Seric, writing for the United Nationals Industrial Research Organisation, has warned that Covid-19’s impact on global production networks will leave a legacy for years to come.
He said: “Exports from China have declined to all regions across the world. This decline has been severe across the globe, with the exception of North America, where trade was already in decline for more than a year due to the ongoing trade disputes between the US and China.
“The picture of a steep decline in goods received from China is similar when looking at numerous individual European countries, including Austria, France, Germany, Italy and Spain.
“The collapse in production activity at the heart of many GVCs necessarily has implications for producers and consumers in countries further up and down the products’ value chains.”