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The ICAEW View

ICAEW gives a brief viewpoint on the Coronavirus global outlook report.

This forecast paints a woeful picture of the world economy over the next 18 months. While forecasting in times of such upheaval is incredibly difficult, we can be pretty sure that the trajectory is true. The report provides the kind of analysis that is increasingly necessary for ICAEW members and others trying to assess the outlook for their operations, for their strategic planning and for disclosure to the markets.

That said, the inherent limitations of current forecasting conventions often result in only a partial picture of what we face. GDP does not capture the distribution of income and therefore does not allow for the cost of rising inequalities. Nor does it include the cost of damage to the environment (climate change and biodiversity loss) on which we depend for our prosperity. It cannot take account of the interconnections of economy, society and nature that are necessary to understanding how the current crisis occurred and how we can move beyond it.

Factoring in these as well would enable us to make better-informed decisions precisely because we would have a more complete understanding of our world, and help us to build a way out of this crisis. It would also enable us to chart a course to sustainable thriving economies. Furthermore, the problems we face are global in nature and require international, collective solutions. We must learn from the last decade and not see a retreat into narrow economic nationalism as the solution to the current problems.