Credit Suisse forecasts global economic growth in wake of COVID-19

Credit Suisse, a global wealth manager, investment bank and financial services firm located in Switzerland, released on Tuesday its economic forecast for the upcoming year, suggesting moderate recovery and an increase in consumer demand as countries continue to loosen coronavirus restrictions. This forecast comes amid the coronavirus lockdown, which has caused a global economic recession. Credit Suisse indicated that the global economy is expected to grow by 4.1% in 2021. Likewise, since interest rates in most advanced economies are low, equities are expected to give better returns. On the other hand, the coronavirus pandemic has meant that market uncertainty continues, along with increasing national debt levels as central banks continue to spend at high rates. In addition, the uncertainty surrounding the US presidential election result has caused concomitant uncertainty in the markets. Global Chief Investment Officer at Credit Suisse, Michael Strobaek, gave his assessment of the state of the global economy in a press release, saying: “We believe that the stimulus measures we have seen since the start of the pandemic together with the economic recovery will support financial assets, equities in particular, in the year ahead. But there are risks that still need to be monitored carefully. To preserve wealth and meet long-term obligations, investors should invest in well-diversified multi-asset strategies with a significant share of portfolios invested in equities.” Nannette Hechler-Fayd’herbe, Chief Investment Officer International Wealth Management and global head of economics & research at Credit Suisse, also gave her input on the impact of the coronavirus on consumer behavior, saying: “For many of us, the COVID-19 crisis has altered the way we live, work and learn. “We believe that many of the economic and societal challenges that have arisen from this pandemic have underscored the relevance of our long-term thematic framework Supertrends, bringing the “future” that much closer,” she said. “For instance, our newest Climate Change Supertrend explains how to invest in order to benefit from the accelerating trend toward decarbonizing economic growth.”Credit Suisse also analyzed growth rates for the global leading economies, predicting that the US will see a 4.2% growth rate in 2021. The EU is predicted to see growth as well, rising 4.6%. China, whose economy actually grew during the pandemic, is forecast to see a heightened GDP growth of 7.1%. Japan is also expected to see moderate growth of around 1.5%. Credit Suisse took note of assets in light of potential global recovery, claiming that equities with low-yield bonds will offer attractive returns. Sectors with expected growth include healthcare and materials, while commodities like gold hit all-time highs during the pandemic.

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