Two scenarios for the world economy in the next 18 months

The recent spate of new Covid-19 cases in the US and China has triggered corrections in stock markets around the world, ending the optimistic mood of the past months.

The favorable winds have not entirely disappeared, but the overall picture is more confused. The management company NN Investment Partners (NN IP) has developed two economic scenarios that describe the possible positive and negative aspects of the next 18 months.

According to Marco Willner, Head of Investment Strategy at NN Investment Partners, - the future that will materialize will be a cross between the two possible scenarios. Seven unknown factors - two positive and five negative - could act as triggers that can shape the future.

These scenarios go beyond the simple assumption that “all is well” and “all is bad”. They take into account the interdependencies of seven factors that could trigger positive and negative outcomes, and help us assess which causalities are actually plausible. Two stories about the future emerge from the interconnection of these unknowns.