BENGALURU • There is a high risk the resurgence in coronavirus cases halts the global economic recovery by year end, according to Reuters polls of around 500 economists, a majority of whom expected the rebound next year to be weaker than previously thought.

Governments and central banks around the world have pledged trillions of dollars of stimulus, helping most economies out of deep recessions. But a second wave of infections in places that eased lockdowns is now under way, leading to more restrictions.

The Oct 6-Oct 27 Reuters polls of economists across Asia, Europe and the Americas, covering 46 economies, showed scant sign of activity recovering to pre-Covid-19 levels anytime soon.

Nearly three-quarters of 150 analysts who responded to an additional question said the resurgence in virus cases posed a high risk of halting the current global economic recovery as early as this year.

"Even before the renewed lockdowns, there was already a broad acceptance that many countries will see a permanently lower level of gross domestic product than they would have done in the absence of the pandemic," said Ms Janet Henry, global chief economist at HSBC.

"Higher unemployment and higher debt appear inevitable, but there are also implications for equality, long-term growth potential and financial stability."

Median growth forecasts for over 65 per cent of those 46 economies were downgraded or left unchanged for this year and nearly 60 per cent of those for next year. The range of forecasts also reveals mostly lower lows and lower highs.

In the meantime, there is no sign of the pandemic letting up anytime soon.

The United States, Russia, France and many other countries have registered record numbers of cases in recent days, and European governments introduced new curbs.

The global economy was expected to grow 5.3 per cent next year after shrinking 4 per cent this year, a touch higher than the International Monetary Fund's projection of 5.2 per cent for next year.

But nearly 80 per cent of economists, or 119 of 150, said a weaker global recovery than previously thought was the greater risk next year, rather than a vigorous rebound or a renewed downturn.

For many major economies, it has been whiplash: plunging into the deepest contraction on record, then growing at the fastest pace ever, only to face trouble once again during the current quarter.

"Unfortunately Q4 also comes with renewed virus challenges. Economically speaking, we might have to bridge another six months or more before a vaccine can offer substantial relief and should weigh heavily on activity in the near term," said Mr Stefan Koopman, senior market economist at Rabobank.

Despite expectations for further monetary stimulus in the euro zone and Britain, and another round of United States fiscal support, the economic outlook was subdued in the latest polls, with the fresh rise in cases the biggest risk to recovery.

For Japan, economists said the government needs to pledge a third stimulus package to shore up an economy hammered by the pandemic, while the Australian and Canadian economies were predicted to grow at a much weaker pace than previously thought.

China, the world's second-largest economy, was projected to grow 8.4 per cent next year, in stark contrast to much weaker recoveries everywhere else.

But some economists outside China expected a much lower figure and said that many forecasts do not capture the real extent of the economic hit.

REUTERS