Rating Agency S&P predicted a global recession
The world economy this year will be in recession for the first time since 2009, writes S&P Global Ratings.
The rating Agency S&P Global Ratings released a report “global recession here and now”. Experts predict that the world economy will be in recession in 2020 due to the coronavirus pandemic. Global GDP growth will be only 1-1. 5%, the Agency predicted.
China’s economy has suffered much more damage than previously thought, despite showing “uncertain” stabilization, s&p said. Industrial production in the country decreased in January-February by 12.3% compared to the same period last year. This is four times higher than the forecasts made. There are risks of re-infecting people, which also delays economic recovery. According to the company’s forecast, China’s GDP growth will be 2.7-3.2% in 2020.
In Europe and the US, a “collapse in demand” will also sharply reduce activity in the second quarter, s&p said. Economic activity will begin to recover this year, but not immediately. EURO zone GDP will shrink to 0.5-1%, and the US to 0-0. 5% in 2020, s&p expects.
“Markets have gone into free fall and volatility has reached levels last seen during the global financial crisis. Shares fell by double-digit percentages. Markets have begun to take into account the effects of COVID-19 on growth, profits and loans. ( … ) Credit spreads were the widest in more than a decade, ” s&p writes.
Investment Bank Morgan Stanley also predicted a global economic recession in 2020. According to his forecast, the global economy will grow by only 0.9%.