Covid-19 Executive Briefing
Understanding the economic impact of the Covid-19 pandemic and the implications for the power sector
- ECONOMIC IMPACT -
Latest update: 9 June
Many economists have cut their GDP forecasts. The 2020 consensus forecast for GDP growth is currently negative and many predict a recession.
Concern over the spread of Covid-19 is trending downwards, while business optimism is trending upwards.
Fitch revised its 2020 forecast for world economic growth to -4.6% from -3.9%. Its forecast for emerging economies (ex. China) dropped to -4.5% from -1.9%.
The Congressional Budget Office of the US foresees economic growth to contract by 11% in Q2 2020 and deficit to swell to $2tn in 2020.
Impact of Covid-19 on asset prices
- SECTOR IMPACT: Power -
Latest update: 3 June
GlobalData analyst view:
"With the easing of lockdown restrictions, power demand is starting to return to normal. Renewable energy has stayed stronger than conventional sources, with its share in the energy mix increasing in most countries during the lockdown. Countries
have been announcing favorable policies to absorb some impact of the pandemic on the power sector."
As per IEA, global investment in energy in 2020 is expected to plummet by 20%, or almost $400bn, compared with last year.
The Mexican government announced new rules to reduce the role of renewable energy, impacting $6.4 bn of investment.
Germany's federal grid regulator, BNetzA, received no bids for onshore wind in the country's latest joint auction with solar capacity.
impact on supply chain and demand