Global COVID-19 Risk Ranges Up to $82 Trillion


The GDP risk over five years from COVID-19 could range from $3.3 trillion to $82 trillion, according to risk analysis of what may go right or wrong.

That is quite the wide range, but please consider the Centre for Risk Studies analysis of the Economic Impact of Covid-19.

The GDP@Risk over the next five years from the coronavirus pandemic could range from an optimistic loss of $3.3 trillion (0.65 per cent of five-year GDP) under a rapid recovery scenario to $82.4 trillion (16.3 per cent) in an economic depression scenario, says the Centre for Risk Studies at the University of Cambridge Judge Business School.

Under the current mid-range consensus of economists, the GDP@Risk calculation would be $26.8 trillion or 5.3 per cent of five-year GDP, says a “COVID-19 and business risk” presentation prepared by the Centre for Risk Studies.

Under the Risk Centre’s projections, the GDP@Risk in the United States would range from $550 billion (0.4 per cent of five-year GDP) to $19.9 trillion (13.6 per cent), in the United Kingdom from $96 billion (0.46 per cent) to $3.5 trillion (16.8 per cent), and in China from $1.03 trillion (0.9 per cent) to $19.2 trillion (16.5 per cent).

The full report from the Cambridge Business Risk Hub requires a sign-in.

Four Scenarios

  1. L1: An Optimistic Recovery Path scenario in which pent-up demand fuels a rapid economic recovery with overshoot on the rebound, with short-term results better than currently expected
  2. L2: Consensus Economic Forecast – the mid-range of forecasts by economic experts, now calling for a slow recovery curve with some period of economic growth before the recovery process
  3. L3: Pessimistic Outlook of structural damage to the economy and a lengthy period of recession
  4. L4: Economic Depression Scenario of a long-term recession with the economy tipped into depression, with “worst-case” estimates by economists and negative assumptions such as severe second waves of infection or protectionist politics.

Global Covid-19 GDP at Risk

Global Covid-19 GDP at Risk

Too Early to Call

I am inclined to toss L1 and L4. 

Note that that the consensus forecast of a 5.3% hit to GDP is not a V-Shaped recovery.

It is still too early. We do not know if Covid-19 will return in the fall, if a reliable vaccine is around the corner, or the results of early end of lockdowns.

There is also mutation risk that could later nullify even a successful vaccine.

Powell Warns Recovery May Stretch to the End of 2021

Meanwhile, please note Powell Warns Recovery May Stretch to the End of 2021

No Shocker

This is not a shocker although it is unusual for the Fed chair to be this blunt.

The message is warranted as the economic data has been nothing but grim.

  1. May 8: Over 20 Million Jobs Lost As Unemployment Rises Most In History
  2. May 15: Retail Sales Plunge Way More Than Expected
  3. May 15: Industrial Production Declines Most in 101 Years

Fed Promotes More Free Money

The Fed cannot directly give money away so that burden falls on Congress.

In additional unusual moves, Fed Chair Jerome Powell and Minneapolis Fed President Neel Kashkari both asked for Congressional Action.

This is a sign of panic. I commented on May 14, Panic Sets In: Fed Promotes More Free Money.

The Fed seldom steps in with fiscal recommendations, especially more deficit increasing measures.


Comments (39)
No. 1-12

This is the price of government fear mongering over the virus. Cooler heads use data rather emotions to make decisions. The people will suffer for our leaders incompetence.


Yesterday I read that Ford closed some plants a few days after reopening because a couple of workers tested positive.

Sorry, but if we have to close entire production facilities down because a couple of people get sick, we are in for a very long and very difficult "recovery" that could last years.

Maybe you need to re-think tossing out L4...

Tony Bennett
Tony Bennett

"An Optimistic Recovery Path scenario in which pent-up demand fuels a rapid economic recovery with overshoot on the rebound, with short-term results better than currently expected"


Nonstarter. Massive debt overhang precludes. Economy was getting mighty wobbly PRIOR to virus ... past year or two a bug looking for a windshield.

Tony Bennett
Tony Bennett

"The Fed cannot directly give money away so that burden falls on Congress."


The $600 / week on top of normal state UE benefits INSANELY stupid (thru July 31st) ... how is business with low wage jobs to compete??


First, 8 deaths so far among workers in one Greeley CO meat-packing plant.

You may want to pretend that this only affects the unloved, forgotten and disposable oldsters and crips in nursing homes tottering with one foot in the grave and one foot on a banana peel, but it ain't so.

This should and will have an effect on plant management and labor relations, and will cause portions of the economy to blink on and blink off until a solution is found.

Second, Sweden, Spain and Italy have only had about 5% of people exposed to the coronavirus as of this week as a result of a systematic test for antibodies. Their toll from the virus has not been insignificant, but still, 5% is a long way from "herd immunity".

This clearly means that for everyone, everywhere there is a LONG way to go until we can say this is behind us.

A gloomy scenario is pretty much baked in, despite what hopium salesmen and quack doctors will tell you in the coming weeks.


Yes much structural damage. went by the recently reopened 24/7 gym yesterday. NO staff , manager sitting in office, 3 or 4 people evenly spaced , reduced hours, no new memberships allowed, no guests, no free passes , rows of aerobic machinery sitting idle. I am sure many cancelled their memberships. I don't need membership because i belong to silver sneakers . Gym gets paid per Diem basis. New planet fitness going in empty K-Mart building . looks like they have stopped build-out.
It's over for fitness centers. The populace will witness increased morbidity because of lack of exercise.


Thanks for the laugh. The raw weekly death data for 2020 (through April) from the CDC is lower than that of 2019.
Here's the data through mid April.

The Wu Flu seems to have a discernible minor effect. The financial incentives for maximizing the reporting of the virus: $13k on hospital addmittance, $39k if placed on a ventilator have corrupted the numbers to the point where the drunk falling off the ladder and dying in come died of the disease because he tested positive the previous week. In London it's seen as a universal cure; it's been 6 weeks since anybody has died of a heart attack.

The financial risk may well be $82 T but it is all caused by the Political filth.

The first quarter of the twenty-first century will be noted by historians as the roll-back of the gains of the Enlightenment. On top of Bush the lessors crimes and Barry the Kenyans “Terror Tuesday’s” time set aside to decide who to murder this week, we have seen the return of Lese Majeste as a jail-able offense.
The destruction of the scientific method: Ferguson’s IC model produces different results with identical imputs, and no- you can’t see the code. The Replication Crisis in that are laughingly called the “Social Sciences” has been roundly ignored by all but a few.
The Cult of political correctness holds full sway- California arrests surfer while freeing felons, San Francisco houses the homeless and provides their drugs and alcohol, the liquor stores are open AA meetings are closed. As are churches. Cuomo slaughters thousands by deliberately introducing the disease to nursing homes full of the most vulnerable.
And the are still stunningly stupid clowns who think authorizing the State tracking the movement of all people is a good idea.
Truly astonishing.


I think the headline is misleading, though maybe Mish himself believes it accurate. But clearly the major damage that Covid19 will cause - possibly for years to come - is not from the virus infection but from the unwise, panic-stricken, politically corrupt responses to it. Far too many in the political class are salivating at the opportunities political restructuring due to economic collapse will engender and so are backing policies that will bring that happy event about - suffering of millions of ordinary people be damned.

The numbers are out with Covid19; thus far it's debatable if it's all that much worse than a bad flu year. It's certainly not many orders of magnitude greater. The shut-downs will ill-advised, but certainly they are borderline criminal at this point with in some cases no real end in sight. Criminal.


I think we will know about additional waves sooner than Fall.


Looking back, the MSM drumbeat about deaths, deaths, deaths is certainly going to be recognized as a factor that ramped up the fear level for many! This is an excellent article.

Deaths vs. Economic Pain: Cable News' Imbalanced Picture
By Kalev Leetaru
May 20, 2020

Almost three months ago, COVID-19 became an inextricable part of American life. As the economy ground to a halt and unemployment soared, television news channels have focused the majority of their attention on the health impacts of the disease, while paying far less attention to the devastating economic harms, including historic job losses. A closer look at how channels are presenting the coronavirus crisis reveals stark differences, from CNN’s ever-present infections dashboard to Fox News’ periodic scrolling updates, offering clues to the increasingly partisan reaction to the pandemic.


The economic calamity is only partly the fault of Covid. The economy was heading south long before the virus started. The root problem is debt, not that people missed a couple of months work and shopping.
We were well on our way to recession before this virus started, as studying the data will show, but the virus and the problems associated with it are supercharging the situation.
In a few months, the news will forget about the virus, and the top headlines will be bankruptcies and unemployment. Deflation is coming, and it is as they say, it is bringing hell with it.


great data. what is the math and assumptions in the 5 year baseline for GDP ? the expectation is that the curve shifts down and grows without interruption at some rate ? thanks