William De Vijlder, on the health crisis and economic perspectives
The global and European prospects for growth in 2021 are positive and the Group intends to contribute.
Perspectives by William De Vijlder, Head of Economic Research at BNP Paribas
What is the economic assessment of the year 2020?
William De Vijlder: From the start of the crisis, governments and central banks had to take strong measures to mitigate the impact of the health crisis on the financial situation of households and businesses. Like the majority of banking players, BNP Paribas immediately joined in these efforts by granting loans, helping its customers to increase their equity or issue debt, while continuing to inform and advise them. We also provided in-depth economic analyses to our asset management and investment customers to assess the impact of the decisions taken around the world by central banks and governments.
How are banks mobilising to support the recovery of the global economy?
William De Vijlder: The priority now is to provide the best possible support for the recovery plans approved by the political authorities. Our actions as banks are, in fact, in line with the measures taken since the beginning of the crisis to support the cash flow of businesses, finance the investment projects of our customers and, more broadly, advise them in their financial choices. The global and European prospects for growth in 2021 are positive and the Group intends to contribute.
What are the main risks that you see for the year 2021?
William De Vijlder: The first risk concerns the possible delay in the economic recovery, particularly in Europe, due to the epidemic’s resurgence in the first quarter. The second concerns the gradual reduction of State aid. How will economic players react? Will the most vulnerable companies halt their activities? What effects could there be on unemployment trends? There are just so many unknowns that we will have to deal with. The third risk is the scale of the shock suffered by businesses, some of which will certainly not be able to resume their pre-Covid level of activity, at least not in the short-term. At the same time, they will also have to reinforce their equity, repay their debts and get back on the road to growth. However, I am quite optimistic. The end of the crisis is in sight, the United States will recover faster than expected, supported by their gigantic recovery plan, with a powerful ripple effect on the global economy. Progress with vaccination should gradually pay off and restrictive measures should be reduced, especially from the third quarter onwards. That surge in confidence should positively support the recovery.