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Reviewing Citi’s Global Growth Estimates

  • Base case shows weak growth but modest momentum. The quarterly profile of the base case forecast shows a dramatic deceleration of economic activity in the first half of the year, followed by a modest rebound in the second half. The recovery is supported by a projected China growth of close to 7% in 2H20. The US is projected to grow only around 1.25% over 2H, although momentum does build a bit. Japan is expected to climb out of recession in Q4 while Europe is expected to be in recession from Q2 onward, although less so as the year concludes. Emerging Asia, after a negative GDP shock in Q1 on account of China, may rebound and strengthen over the course of the year. The growth rate for Latin America is expected to stay in positive territory and may increase each quarter on a year-on-year basis. In sum, although the profile of quarterly performance may yield weak year-on-year growth of about 1.3% for the global economy, there is positive momentum building into 2021.
  • Alternate-worse case shows near zero global growth and no momentum. This is characterized by a sharp collapse of Q1 global GDP into negative territory, followed by positive but persistently slow growth over the course of the year. For the US, after Q1 normalcy, growth averages a very weak 0.5% on a year-on-year basis for the remainder of 2020. China experiences an unprecedented GDP fall to -8% in Q1 and only a sluggish recovery in subsequent quarters. Europe’s recession worsens over the year. Emerging Markets have sub-2% growth for the year. In this alternative case, the overall year-on-year global growth is essentially 0% and there is also no momentum to build into 2021.


  • Data emerging over the last few weeks on the health and economic effects of COVID-19 have been striking. Consumer activity, business investment and overall sentiment have been affected by social distancing and/or lockdowns. The success of policymakers as well as behavioral responses of consumers and businesses, are likely to determine whether the base-case scenario or alternate-downside outcome takes place.

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