The global economy is in the midst of a major contraction. The pandemic has resulted in shutdowns across developed and emerging markets.

This has caused a sharp deceleration of economic activities, countered with an unparalleled magnitude of monetary easing and fiscal stimulus. Now, parts of the economy are being reopened and it is likely that economic activity will pick-up gradually as more lockdowns are eased. Still, economic activity remains at suppressed levels and we estimate it will take well into 2022 for the economy to recover to pre-Covid-19 levels. Financial markets took a hit as the economy slowed. Generally speaking, risky assets nosedived as economies were shut and safe havens appreciated as investors fled to safety. Since mid-March markets have stabilized; some specific pockets of the markets have rebounded, but the overall picture is that risky assets still trade below pre-Covid-19 levels.