Coronavirus: Slower growth should be expected after the crisis – Natixis
|Three mechanisms or risks explain the low-growth profile that economists at Natixis believe the recovery will take after the corona crisis.
Key quotes
“We believe the profile that GDP will follow after the crisis will be V-shaped, with a somewhat flatter right-hand line of the V.”
“The collapse in corporate revenues in a recession leads companies to run up debt. This increase in debt can then curb corporate investment for a long period.”
“The risk that governments, whose public debt has increased sharply during the recession , may want to reduce it and adopt a more restrictive fiscal policy too soon after the crisis.”
“The increase in corporate debt justifies a rise in companies’ borrowing costs. This increase in borrowing costs stems not only from a rise in risk premia at all rating levels but also from the fact that the average rating of companies is lower.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.