This discussion was held by videoconference. Good morning, good afternoon and good evening depending on where you are. Thank you for joining us. Im Vice President of the Global Economy and Development Programs at brookings Global Economy. Disrupting billions of life and jeopardizing progress. The Global Economic process which relates to todays conversation from a five of present and global gdp in 2020. This is the cheapest global recession since world war ii. Its a report defined by fundamental drivers of longterm growth including investment which would slow capital formation. Beyond the headline Economic Growth number, the pandemic is having a proportionate effect lower Income Countries in a way the economy isd dominated most limited ability to adjust to covid related measures such as confinement. Similarly, most vulnerable population in the economy are more exposed. The pandemic is likely to leave a legacy of water inequality between and within countries. Disruptive of the pandemic for the lives in the economy around the world, it is uncertainty as to whether we have seen the worst case scenario. Notably, the epicenter of the pandemic appears to have gone to the globalth south with combatig the virus is more limited. Elevated debt levels in countries and the inability of countries to use their own decurrencies. Letting the pandemic means the global system remains. The virus will remain a threat for the Global Economy and eradicated in every country. We are seeing a resurgence of cases in some countries, notably the United States, policy makers and meanwhile, encouraging progress in timing for the discovery for a vaccine remains uncertain. This raises questions and my friend, how sensitive is the Economic Outlook for next year . Such as tourism. What do we make of the apparent disconnect between main street and wall street with stock market indexes have recovered much of their losses despite highly uncertain economic environment. Finally, are there any silver finally in the Silver Lining word we see a stronger economy . How should we make it our priority when seizing the opportunity to revive the sluggish School Productivity which has been threatening the majorie economy since the Global Financial crisis. These are among the questions on our minds and we imagine what a Global Economy could look like. We are fortunate to have with us a Diverse Panel of experts who will make sense of the sol and i look forward to the conversations which will be moderated and my colleague David Wessell and our world bank colleague ayhan kose. Thank you it over to you ayhan area did thank you for organizing this distinguished panel. The Global Economy prospects because of the dash im just going to focus on three points. The first about the sharp implications of the pandemic. This is going to be the deepest and most synchronized global recession since the second world war. Emergingco markets and economies in the first recession from experience is on record. It is a somber outlook. Risks are tilted to the downside and the second term is the longterm applications of the covid19 pandemic. We have seen of the for following deep recessions with lasting in the context of the pandemic we are expecting potential output and bigger partake to video for the longterm. Finally policy priorities are on the agenda to discuss and they are addressing the Immediate Health crisis and urge them priorities but beyond the crisis policymakers need to look forward and undertake policy measures to lay the foundation for strong and sustained growth. And we will review this acronym emde emerging market in developing economies. By now its clear that there is a plunge in activity around the world. We are expecting Global Growth to be around 5. 2 this year. In the case of an economy contraction is going to be large but emerging markets and world economies were nearly the engines of Global Growth for an extended period of time. They will experience the first recession and they will see it contract by 2. 5 . If you look around the regions you see differences but pretty much a serious downturn is on the way. The in the case of east asiapacific they are expecting the fastest growth primarily because china had growth this year and all the Major Economies delivered positive growth by a meager 1 . Othert than that all regions wl have historic contraction. If we look at the caribbean it will see a contraction like its over the past 100 years. Growth will be around minus 7. 2 . Southern Africa Europe and central asia middle east regions a number of countries with commodity exporters will see significant declines in their growth rate. In south asia region that is an exporter will see historical contraction of 3. 2 . Next year growth welcome back but a modest recovery compared to what we had this year. This is a truly historic recession. If we go all way back to 1870 we had reasonably good data there have been 14 global recessions and each global recession you saw the local economy contracting. This will be the fourth deepest global recession since the second world war. Global recessions are important to understand here. Through all of this they are associated with so this global recession will bess the after thence 1870 Great Depression. The future of this episode is that the Global Economy will see a higher share experiencing contraction slightly more than 90 this year. This number is higher even than what we saw at the height of the Great Depression. There are risksks down the road and this is still tilted to the downside for the single most importantt risk is effective waves of pandemic. Now if you look at where we are if you take out the United States you will see that the number of daily infections is down significantly since the beginning of march. On the other hand and emerging market in the Global Economy the pandemic is in full force. N in south asia we see a significant increase in the number of infectionsct. These are the regions with limited Health Service capacity and limited capacity so we have a limited understanding of the gravity of the pandemic in these regions. Now, beyond the shortterm this pandemic will have longterm implications. There is no question there are large losses and these losses are not going to be recouped next year when the growth comes back. In fact as it happened during the 2009 global recession we are not going to go back to the same output anytime soon. These types of deep recessions will have longlasting scars and ami negative effect physical capitulation and of course productivity. Another important consequence of this pandemic is how the Global Economy will basically generate growth. It will be affected by the devastating shock we are going through. Prior to the pandemic Global Growth longterm has gone downward since the Global Financial crisis. In 2010 we had the Global Economy that wouldld generate growth of 3. 3 . That number declined below 3 in 2014 and now its at 2. 4 rate likelihood the pandemic will have a long term effect on Global Growth expectations. Now, an overwhelming response to the crisis. This response was necessary but of course sooner or later this will be in the form of much higher deficits and its going to be important for government to discuss this when the time comes and to reach sustainable levels of debt. Bt this is an important risk we need to Pay Attention to. This crisis so far is not the type of systemic financial we saw in previous episodes of the deep recession but we shouldnt deceive ourselves as we saw after the Global Financial crisis there me maybe repercussions especially for those economies. Policy priorities are clear. In the shortrun help an economy is the key. This will require helping vulnerable groups and the idea of keeping the economy afloat and intelligent way. Policies globally are also difficult and in this context we went to those economies that will open economies the poorest emerging economies though the desperate times they n are facing now. If the crisis of aids policymakers need to look forward and put in place policies for sustained longterm growth. There are a number of important points. Their size discussion about what is urgent and what is important. That urgent policy issue is in the context of the shortterm and there are critically important policyan priorities tt we think about in the aftermath of the pandemic. Its going to be difficult in growing investment transparency to attract necessary activity will be important. Second of all coordinating policies globally to address global challenges this key including those related to Public Health and providing the necessary information when these types of challenges emerge. Global trade and Financial Assistance are also experiencing debt. We need to push forward and basically trading system and financialin system necessary. Theres a small probability of emerging. In this context its going to be important to address the challenges associated with the climate change. Like lisa during the Global Financial crisis airs a question about the shape of the recovery. Many shapes have been proposed, that the shape of the e shape. The v shape is associated with covid. I think this debate is useful to simplify the trajectory. This Global Economy struggles with the pandemic. Lets make no mistake about the nature of the recovery. Its going to be a painful one and policymakers need to provide immediate comprehensive bold responses on how they are going to turn their economies around. Thank you. Thank you ayhan. Im hoping everybody can see the whole panel at this time. I am David Wessell director of the center at brookings. Im joined by my colleague eswar prasad who spends his time between brookings and cornell and joyce chang who is the chair ofwh local research at jpmorgan which you can tell from her backdrop. She hasas one employer and braha Sangafowa Coulibaly who you met at the beginning of our program the new Vice President for Global Economic development at brookings is joining us as well givenve his interest in africa project like to start with joyce and joyce your view of the World Economy matches the one that ayhan laid out and particularly what you see in emerging markets preview talk in your recent report i saw about the growth rebound a powerful bounce in emerging market but they know ayhan posner presentation made clear its a diverse set of markets latin america that differs from africa and differs in china. Have you see the world and how do you see it differently . Thank you so much david for those questions in thank you so much to the Brookings Institution for the invitation and an excellent report from ayhan. Let me start with the first question that ayhan brought up which is why is there such a disconnect attained mainstream to wall street and then ill go markets emerging discussion. The first ever say is this time around compared to the Global Financial crisis you had an immediate proactive response from all of the Central Banks and emerging market Central Banks. If you look at the size of the expansion of the Balance Sheet we i estimate it is about 20 of gdp. If you compare that to what happened during the Global Financial crisis thats about 6 of gdp. Youso extend the Balance Sheet y more than three times the Global Financial crisis predicted same time if you look at how low Interest Rates are right now we have to make that nearly 70 of global Government Debt at 50 basis points or less. You have basically zero debt for 70 of the market and thats money in the equity markets. The same time the market is court hears so you have to be careful you will have to return in volatility. We estimate 60 weaker than it was in the market that when it was prepandemic. Thats the first thing id say about the disconnect between street and wall street bbc Balance Sheet who is expanded by 3 trillion a buying spree of epic portions here. Let me just turn to the Growth Outlook in the growth forecast and we didnt agree with ayhan that this is the largest declined in years and the thirdlargest in 120 years. We have the advanced economy contracted by the 4 and an emergency we take out china because as one of the few countries growing in a positive sense. You have growth of 6 in emerging Market Countries. We do seet a rebound because te first half we had about the 16 annualized drop in gdp so when you turn everything off you are going against a rebound. This is the part of the recovery and i would say a complete recovery with respect to the level of gdp and the level of gdp at the end of the year we think will be about four Percentage Points below where it was prepandemic preview have the e shape numbers in d. C. 20 of the gdp in the second half of the year but if you look at where we are with respect to gdp, the level of gdp we are below where we were prepandemic. Its income loss in productivity loss and i think its going to be a large longlasting damage that you have another one or two months where its going to look quite good. This is going to be trickier in the Fourth Quarter because many of these incomes will be lost and what are we left with . We arert left with 13. 8 of gdp the highest in 80 years. We are looking at publicde sectr debt at 15 to 20 Percentage Points higher and we can break that down to liability and we are looking at in the emerging markets really three different scenarios for emerging markets. China has been doing better. Its in the recovery right now and taiwan is doing better so the north Asian Countries are doing better but if you take a look at latin we are looking at 9 contraction and this is where the pandemic still has not peaked yet. This is where we are seeing some of the biggest losses that will take place. Then you have the subsaharan african countries where they are in Debt Forgiveness and all these official relief measures that have been set via the g20. Hard to characterize emerging markets as one block that china is very important here. China we estimate everyone decline in chinas growth is about. 4 of local growth. This is why we look at the numbers with china and chinas recoveryd has been surprising. We are looking at it decline of trade thats been going down consistently over the last couple of years and its going to continue. Let me with a comment on the look ahead. U. S. Election plus china tensions brexit as well as the possibility of a second wave i think what you are seeing now is a stubborn first wave and possibility of a second wave and sometimes we will have a vaccine ready. The losses at the corporate level are going to be sick if it didnt despite the market rebound we have seen in the Financial Market. Profits dropped by 70 and we are at a 6 rate the highest in 10 years. We have 150 billion of that downgraded from high grade two but its a tremendous level of support coming from the Central Banks more broadly which has supported the markets and its not just developed countries in Central Banks is emerging markets pushing assets as well. We have really gone from credit to tem thats what we need to monitor Going Forward area. Fo you said the stock market has been strong despite the scary headlines of the economy in part because they are two alternatives for money and the Central Banks have made it attractive but is the market basically assuming there wont esl can wave or decline, lasting decline in globalization are ing lasting decline productivity . Is the market fully factored in for some of the risks you elaborate . And think . The market, the fd is going nowhere anytime soon but the federal banks are in it for the longhaul. This has been a real paradigm shift and i think they are zooming there wont be a lockdown like we saw in march and april and even if you have a second wave its not going to be met with that type of lockdown we are seeing we are not seeing as big of a wave as we saw a few months ago. I think what the market is looking at is 80 of the s p 500 stocks have a higher dividend or shareholder yields than treasury yield or if you ha