China’s economy is unique with growth forecast for 2020; other countries struggle for Investing.com

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© Investing.com

Por Geoffrey Smith

Investing.com – China, which unleashed the worst economic contraction since the Great Depression by allowing the Covid-19 virus to spread, emerged from the crisis in better shape than almost any other economy in the world.

The International Monetary Fund said last week that it expects the Chinese economy to grow 1.9% this year, while all other G20 economies are expected to shrink.

This week’s new figures in Beijing suggest that this may even be very pessimistic: China’s Gross Domestic Product increased over the previous year in the third quarter and compared to the second quarter. In an encouraging way, both the quarter ended with an increasing momentum, registering its biggest increase since the pandemic.

Even considering China’s traditional ability to generate the kind of GDP statistics you want, the picture is too clear not to be ignored: the draconian crackdown on public life in January and February has allowed for a more vigorous recovery than anywhere else in the world. world.

It is not just mature and aged markets, such as Europe and Japan, that look pale and weak compared to China. India – whose potential medium-term growth rate is comparable to that of China – is expected to have the worst GDP drop of any major economy this year, according to the IMF, thanks entirely to its inability to prevent the virus from spreading through its tight cities and extensive and the interior with few resources. Its 7.6 million cases are second only to the US 8.2 million.

Brazil’s GDP is also expected to shrink 5.2% this year and recover only half of those losses next year. India and Brazil have the second and third highest death counts caused by the virus in the world, and deficiencies in data collection suggest that the actual number of the virus in these countries is even greater than official figures suggest.

The varying degrees of success in fighting the virus are also reflected in the relative health of these countries’ stock and currency markets.

Despite a drastic deterioration in relations with the United States and India, another important trading partner, China rose to a two-year high against the dollar in early October, while the SZSE index is the only major index in the world that surpassed the one so far this year. All major stock indexes in China are up year to date, while India and Brazil fell by 2.2% and 15%, respectively. Meanwhile, Russia’s has the worst performance of all major emerging market indices, down 27%.

Not to mention the currencies of these three countries against the dollar. The real accumulates losses of 27.48% against the dollar this year, the Russian ruble falls 19.71% and the Indian rupee falls 2.29%.

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