‘Economy might take only 5% hit from pandemic’
GUERNSEY’S economic downturn could be only between 3 and 5%, The International Stock Exchange chairman Jon Moulton said during the recent We Are Guernsey’s Funds Forum webinar, compared to 15 to 20% in the UK.
Mr Moulton, who specialises in turnaround businesses, said that the difference between the 2008 financial crash and the one brought about by the coronavirus is that it’s not the financial industry that has taken the brunt, but rather consumer-facing businesses. The aviation industry and anything feeding into that has been particularly badly hit.
‘We’re blessed with having such a strong financial services industry in Guernsey,’ he said. ‘It’s possible our economy will go down three, four, five percent, compared to the mainland which could go down 15-20%.
‘It’s an enormous difference. It’s still not going to be easy, but we’re quite blessed in a way.’
Asked how he would describe the disruption compared to others he’d seen over his career, Mr Moulton replied that it was ‘very different’, the absence of a banking crisis being the most obvious thing.
‘Nearly all other crises have had banking crises in the middle,’ he said. ‘Here, we have this bizarre world where the government issues gilts and the Bank of England buys them and everybody is happy. You don’t need to be a genius to recognise that this relies on confidence.
‘I worry quite a lot about what’s going to happen to the monetary system in the medium term.
‘It’s not this month, not next, but at some point you’d rationally expect the pound sterling to subside.
‘We’re moving into completely uncharted territory with these monstrous amounts of government borrowing all over the globe. I don’t know how it plays out.
‘But it’ll certainly give rise to both opportunity and disaster.’
The online event attracted 1,019 registrations, 326 from on-island and 693 from off-island, covering 35 countries.
The headline sponsors were Carey Olsen and Ogier.