According to Zhu Jun at PBOC, in addition to causing a temporary economic shock and standstill, #COVID19 has also brought about profound structural changes in the following aspects:
new.cf40.org.cn/uploads/202005…
1.1. The pandemic has altered the behavior of #market players and consequently the economic structure. #Consumption behavior and business models are changing.
1.2. Social distancing may inhibit certain traditional offline service industries for a long time, especially those offered by small and medium-sized firms. However, it will also stimulate new demand and bring opportunities to emerging industries.
2. Trade #protectionism and deglobalization may gain momentum.
3.1. Rising #debt pressure holds back growth momentum. Economic shutdown has led to a sudden stop in income and debt expansion in households and businesses. Short-term fiscal deficits and government debt have surged as a result of relief and stimulus measures.
3.2. Many emerging market economies already have sizable debt service obligations. Advanced economies that had high public debt levels before the pandemic are under increasing fiscal pressure.
3.3. Therefore, it is reasonable to expect that most countries will face high leverage and debt levels and take a long time to digest the debt overhang. The dynamics of growth will be depressed.
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