A global economic recession is now all but guaranteed in 2020, with analysts worldwide continuing to slash their already grim forecasts as the rapid spread of the coronavirus pandemic outside China results in unprecedented containment measures and a rising number of businesses in danger of bankruptcy.
The moves by central banks around the world to cut their interest rates to record lows and by governments to pump huge amounts of money into their economies – including the new proposal in the United States to spend around US$1 trillion to bail out troubled businesses and provide a cash handout to every American – have come too late, according to analysts.
The question now becomes how deep the downturn will be, and how long it will last, with worst-case scenarios seeing weak growth continuing into 2021.
Analysts have already cut their global growth forecasts for this year to between 1 to 2 per cent, attributing the certainty of a recession to the shutdown of key economies in Europe and the US, worse than expected Chinese economic activity in the first quarter and the negative impact Covid-19 is having on “all aspects of life”.
The International Monetary Fund defines a recession as an annual global growth rate below 2.5 per cent. The global economy grew only 2.9 per cent last year.
In the past 48 hours, a growing number of analysts have made further adjustments to their forecasts to make a clear call for recession in coming months.
“Since our last update, which was on March 3, the spread of the coronavirus has accelerated, and its economic effect has worsened sharply,” ratings house S&P Global said on Tuesday. “The long-awaited initial figures from China for January and February were much worse than feared.
Britain, in announcing its £330 billion (US$400 billion) stimulus package on Tuesday, said lockdowns could last up to 18 months until a vaccine becomes available, while the Australian government said quarantines could continue for six months. Photo: APBritain, in announcing its £330 billion (US$400 billion) stimulus package on Tuesday, said lockdowns could last up to 18 months until a vaccine becomes available, while the Australian government said quarantines could continue for six months. Photo: AP
Britain, in announcing its £330 billion (US$400 billion) stimulus package on Tuesday, said lockdowns could last up to 18 months until a vaccine becomes available, while the Australian government said quarantines could continue for six months. Photo: AP
A global economic recession is now all but guaranteed in 2020, with analysts worldwide continuing to slash their already grim forecasts as the rapid spread of the coronavirus pandemic outside China results in unprecedented containment measures and a rising number of businesses in danger of bankruptcy.
The moves by central banks around the world to cut their interest rates to record lows and by governments to pump huge amounts of money into their economies – including the new proposal in the United States to spend around US$1 trillion to bail out troubled businesses and provide a cash handout to every American – have come too late, according to analysts.
The question now becomes how deep the downturn will be, and how long it will last, with worst-case scenarios seeing weak growth continuing into 2021.
Analysts have already cut their global growth forecasts for this year to between 1 to 2 per cent, attributing the certainty of a recession to the shutdown of key economies in Europe and the US, worse than expected Chinese economic activity in the first quarter and the negative impact Covid-19 is having on “all aspects of life”.

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The International Monetary Fund defines a recession as an annual global growth rate below 2.5 per cent. The global economy grew only 2.9 per cent last year.
In the past 48 hours, a growing number of analysts have made further adjustments to their forecasts to make a clear call for recession in coming months.
“Since our last update, which was on March 3, the spread of the coronavirus has accelerated, and its economic effect has worsened sharply,” ratings house S&P Global said on Tuesday. “The long-awaited initial figures from China for January and February were much worse than feared.
The increasing restrictions on public gatherings and travel plans, the downturn in Europe is likely to be deeper than previously expected
Keith Wade
“The spread of the virus, which the World Health Organisation declared to be a pandemic on March 11, appears to be stabilising in much of Asia.
“However, the increasing restrictions on person-to-person contact in Europe and the US have sent markets reeling as risk-aversion rises and views on economic activity, earnings, and credit quality deteriorate sharply.”
Despite recently downgrading its global growth expectation to 2.3 per cent from 2.6 per cent in the first week of March, investment firm Schroders trimmed its outlook again to 2 per cent on Wednesday, projecting an imminent recession following surprising national lockdowns and border closures in Europe.