The GDP of developed economies will decrease by up to 5 % over the next 10 years - Oradel
Costs will drop for manufacturing companies that move their operations from China to Mexico
5 October, 2020
Expectations for the industrial sector
5 October, 2020

The GDP of developed economies will decrease by up to 5 % over the next 10 years

In 2030, the GDP of developed economies could be 2 to 5% lower than the levels that could have been reached if the COVID-19 pandemic had not occurred, according to estimates published by IHS Markit.

According to the economic information provider and consulting firm, crises not only cause short- or medium-term recessions, but can also cause long-term damage. 

Debt and investment implications for developed economies

Higher debt and bankruptcy levels in developed economies will affect corporate investment. However, IHS Markit believes that the pandemic could have a positive effect on investment in robotics, replacing manual labor with equity.

Furthermore, productivity will be affected by the breakdown of global supply chains and the downturn in globalization. Although the manufacturing industry will be affected the most, the trend towards digitalization could improve productivity in the long term. 

IHS Markit also published forecasts indicating that after a 5.1% contraction in 2020, the real global GDP will increase 3.5% annually between 2021 and 2025, 2.8% annually in 2030 and 6% in 2040.

The consulting firm mentioned the global financial crisis of 2008, which damaged productivity, the labor market and business fixed investment throughout the decade of 2010, and caused the level of real GDP in 2019 to be between 5% and 8% lower than projections made before the recession. In 2019, the world economy increased by 2.3%, representing the lowest annual growth of the decade.

Oradel Industrial Center offers attractive investment opportunities in Mexico.It offers industrial buildings for manufacturing and logistics. The Industrial Park has the infrastructure and human resources to fulfill the  needs of international companies.

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