The recession in the global economy, caused by measures to combat the spread of a new coronavirus, will be much stronger than the last financial crisis, according to experts of the research and analysis company IHS Markit.
They seriously lowered the GDP growth forecasts for several regions and the world as a whole compared to the previous estimate made only about two weeks ago. However, they note that further deterioration of the forecast is “almost guaranteed.”
“IGS Market now believes that the recession from CAVID-19 will be deeper than that caused by the global financial crisis in 2008-2009. Real global GDP should fall by 2.8% in 2020, compared with a 1.7% landing in 2009,” the company said in a statement.
At the same time, two weeks ago, they did not exclude the growth of global GDP this year by 0.7%. Now experts expect that the US economy will shrink by 5.4%, whereas previously they did not rule out a decline of only 0.2%.In the Euro area, GDP may fall by 4.5%, while in Italy it may fall by 6% or more. Earlier in March, experts expected the currency bloc’s economy to decline by 1.5% this year. At the same time, the peak of GDP cuts in Europe may come in the second quarter and turn out to be much worse than the values that were recorded at the height of the last financial crisis.
Russia’s GDP may fall by 3.4% in 2020, experts say.
As for China, economic activity in the country is expected to have declined by almost double digits in the first quarter. It will recover earlier than in other countries where the virus spread later. IHS Markit forecasts China’s economy to grow by only 2% in 2020, followed by a stronger-than-average rebound in 2021 due to an earlier recovery from the pandemic. In the previous forecast, the company assumed that the country’s GDP would grow by 3.9% this year.
At the same time, in all the listed countries and regions, IHS Markit expects