1/5. Some thoughts on the #COVID19 economic shock. The magnitude (and synchronicity) of the collapse is enormous. Global Q2 GDP could be down by as much as 20% (annualized). $6 trillion of global value add will be lost. And 200m jobs will likely be shed.

2/5. The nature of the “recovery” is key. Can the global #economy co-exist with the virus? Will the re-opening be smooth or halting? What does it mean to have globally de-synchronized re-openings? And, importantly, how quickly can we return to normalcy?

3/5. In the meantime, a lengthy transition towards normalcy entails dangerous “non-linearities”: Job losses could become permanent; elevated default rates could be a structural hit to supply; and the socio-political consequences of the enormous income shock could prove dangerous.

4/5. Within the above backdrop, #EmergingMarkets are at a particularly dangerous juncture. Growth is collapsing at an alarming rate. And most EM countries are well behind on controling the infection which, in turn, will make the re-opening either less likely or more dangerous.

5/5 #EmergingMarkets defaults and job losses will be a reality we’ll have to live with. Reactive policy space is limited and, for countries that do try, unintended consequence could be significant. Finally, the political context is fast becoming toxic and un-predictable.