The global shutdown due to coronavirus has hurt the global economy immensely, particularly the economies of the West. Manufacturing and especially services are heading to the bottom, with European services PMI falling close to 0 points, as we saw yesterday. The business climate has been deteriorating as well, with German Ifo business climate falling to record lows this month, as shown below.

Germany April Ifo Business Climate Index

• April Ifo business climate index 74.3 points vs 79.7 expected
• March business climate index at 86.1 points
• Expectations 69.4 points vs 75.0 expected
• March expectations stood at 79.7 points
• Current assessment 79.5 vs 80.5 expected
• March current assessment at 93.0 points

Comments by Ifo economist, Klaus Wohlrabe

• There will likely be no V-shaped recovery
• German economy is in its toughest time since the reunification
• There will be signs of economic recovery from mid-year at the earliest

Despite the economic crash that Europe and the US are going through, many economists were agreeing that we would see a V-shaped recovery in summer after the virus lockdown ended. After all, China rebounded nicely in March after the dive in February, but at this point, whatever comes out of China, take it with a pinch of salt.