Trade losses could total USD3.5tn in 2020. Insolvencies are set to increase by +20% in 2020. Up to one third of jobs are at risk of being lost without targeted protection schemes for longer.

D-day in sight? Substantial excitement about a seemingly imminent exit from the coronavirus lockdowns is overrated. Managing the reproduction rate (R0) of the virus effectively will mean most economies will function at 70% to 80% of their potential for two-three quarters. Capital markets may thus get worse before they get better as realization kicks in. Also, watch the seven triggers for a protracted crisis instead of a U-shaped scenario.

Adaptive policy toolbox urgently needed. Double-digit fiscal deficits, additional debt burden and ballooning central bank balance sheets (50% of GDP for both Fed and the ECB) helped mitigate the financial, economic and social costs of the crisis. Yet, now is the time to design policy for the solvency crisis ahead, and repair and recover. We designed a policy menu of options to tackle the economic stages of the Covid-19 crisis.

Regional outlooks include the U.S. and Europe charting diverging pathways, China confirming a very partial rebound and Emerging markets facing a perfect storm.