Corporate DispatchPro
From the Great Depression to the Great Lockdown. WHAT CAN WE EXPECT FROM THE MALTESE ECONOMY? The dramatic changes that we experienced in the past couple of months shook our foundations, our expectations and even our definition of normality. A rare disaster, possibly not even a one-in-a-life-time event, has resulted in tens of thousands of lives lost, and the resulting social distancing, quarantines and lockdowns have quickly translated themselves into an economic collapse whose size and speed is unlike anything we had ever seen. The only logical comparisons that economists and historians could attempt is the Great Depression of the 1920s, and without even investigating the nature of what happened back then, the name is enough to hint what is in store. The worst thing about carrying out an analysis right now is the unknown. Not only we do not know how long the current situation will linger, but epidemiologists and health authorities around the globe refuse to exclude a second wave later in Autumn or perhaps early in 2021. Earlier this month, the International Monetary Fund headlined an estimate that world GDP will lose 3% in 2020. Yet, it only took some gloomier health projections in Europe and the US a few days later for its managing director to admit that this outlook “could be too positive�. However, there is one important consideration that seemed to have gone out of all economic analysis. The pandemic, surely, brought the world to its knees. However, international markets, particularly the eurozone, were already looking at a bleak year before all this has started. Gone were the days of significant growth and while the 77
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