Analysts: Global Economy Entered a Recession Caused by Coronavirus Pandemic

Economists expect recession to happen in US and European economies by the end of the year, a slight growth is only possible in China The world economy is in recession, since the blow to economic activity caused by the coronavirus pandemic has already spread to many industries. This is the opinion of the majority of economists Reuters surveyed on Thursday. The COVID-19 pandemic shocked financial markets in the strongest since the 2008 global financial crisis. This has already been announced by dozens of central banks in Europe, America, Asia and Australia. Investors do panic about stocks, bonds, gold and commodity prices, highlighting the expectation of serious economic damage from the coronavirus outbreak. More than three-quarters of economists (31 of 41) surveyed this week in North and South America announced that economic growth around the world has already ended when asked about whether the global economy is in recession or not. “Last week, we came to the conclusion that the shock from COVID-19 outbreak will cause global recession due to the reduction of all world contracts in three months from February to April,” Bruce Kasman, head of global economic research at JP Morgan, said. “There is no longer doubt that the longest-running global economic growth in history will end this quarter. The key question for the future now is to assess the depth and duration of the 2020 recession,” Kasman added. Economists have repeatedly lowered their growth forecasts over the past month and increased forecasts of the likelihood of a recession in most major economies in the world. The most pessimistic scenarios, which were mentioned just a few weeks ago, have already become central to most economists participating in the Reuters survey. According to Ethan Harris, head of the global economy department at BofA two of the three largest economies in the world - the US and the eurozone - will see negative growth, and the Chinese economy will "grow by a negligible 1.5%." “Our first publication about the shock [for the economy] of the virus was named “Bad or worse”; now we’ll change the name to “Really Bad or Much Worse”. Now we expect COVID-19 to cause a global recession in 2020, similar to the magnitude of the recessions that occurred in 1982 and 2009,” says Harris. The global economy is projected to grow 1.6% this year, which is about half the 3.1% forecasted by the Reuters survey in January, and this growth will be the weakest since the global financial crisis of 2007-2009. Forecasts of global GDP growth in 2020 vary from -2.0% to + 2.7%. “As coronavirus cases become more frequent, damage to the global economy will intensify. We lowered our forecast for global GDP growth to 1.25% per year - this is less than in 1981-82 and 2008-09, but worse than during the crises of 1991 and 2001,” researchers from Goldman Sachs noted. “Accordingly, our economists expect a recession in Europe, Japan, Canada, and possibly the United States.” The US economy will almost certainly enter a recession this year if it hasn’t already entered it, stated the survey released on Thursday after emergency measures taken by the US Federal Reserve. “The US economy will be shocked by this coronavirus, and I think there is still a lot of uncertainty about the size, depth, and duration of the shock period,” Tiffany Wilding, economist at Pacific Investment Management Co. (PIMCO) said. “We are still thinking about it.” We believe that it is likely that this year in the US there will be a slight technical decline.”