By Isaac Cohen*
It is an indication of the uncertainty caused by the pandemic that both major world economies will not release expected economic growth targets for this year.
In China for the first time in 25 years, last week, the authorities decided to refrain from announcing a target for this year’s economic growth, as it was done every year during the sessions of the National People’s Congress. As quoted in The Wall Street Journal (06/01/20), Premier Li Keqiang said “there is a conflict of interest” between economic growth and fighting the pandemic.
`Almost simultaneously, the White House informed the mid-session review of its federal budget proposal, usually made by the end of the summer, will not include economic growth projections. As quoted in The Washington Post (05/29/20), “White House officials” said “the novel corona virus is causing extreme volatility in the U.S. economy, making it difficult to model economic trends.”
Other projections of this year’s economic growth rates in both economies signal an abrupt interruption in their respective economic expansions. In China that means the end of two and a half decades of sustained economic growth, sometimes at spectacular two digit rates, which gradually slowed down to 6 percent last year. In the United States it means the end of the longest economic expansion on record, which lasted almost 11 years, with moderate growth rates of around 2 percent, low inflation and unemployment rates of less than 4 percent, not seen in half a century.
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.
