Why manufacturing economies will bounce back faster than service economies after pandemic
Washington/ Singapore: The restart of the world economy risks going ahead without a key ingredient: the consumer.
Getting companies to resume operations and factories to reopen is one thing. Persuading consumers to brave catching the coronavirus and go out to shop, eat, travel or watch sports is another.
“Nothing about reopening the economy will be easy, but restarting businesses will be more straightforward than restarting aggregate demand,” Moody’s Analytics Chief Economist Mark Zandi said.
The result: An uneven reboot for the global economy, with manufacturing and the nations dependent on it bouncing back fairly quickly, while more communal service-sector activities and countries lag.
That will keep pressure on governments and central banks to continue their support as their economies claw their way back from the deepest worldwide downturn since the Great Depression.