American and European economic experts said that the recession in global economy is already here considering the deepening impacts of the coronavirus disease 2019 (COVID-19) that continuously spread worldwide.
31 of 41 economists that were recently polled by Reuters said the virus has sent markets into tailspin despite the stimulus actions of Central banks of Asia, America, Australia and Europe for the past days.
“Last week we concluded that the COVID-19 shock would produce a global recession as nearly all of the world contracts over the three months between February and April,” said head of global economic research at JP Morgan Bruce Kasman.
The Bank of America, for its part, said it is expecting the economy to collapse in the second quarter and has also warned that millions of people will be left jobless.
“We are officially declaring that the economy has fallen into a recession … joining the rest of the world, and it is a deep plunge…Jobs will be lost, wealth will be destroyed and confidence depressed,” Michelle Meyer, Bank of America U.S. economist, noted.
As the coronavirus cases and death toll soar, damages to the global economy likewise increase. Economists have repeatedly cut their growth outlook with stocks, bonds, gold and commodity prices plunging.
Other economists claim that the recession is rooted from the weaker demands and disruption in supply chains, with the world’s second largest economy being the epicenter of the virus.
“The initial data from China suggests that its economy was hit far harder than projected, though a tentative stabilization has begun,” S&P Global’s Chief Economist Paul Gruenwald explained.
Economists now expect recessions in other parts of the world including Canada, Europe, Japan, and the United States due to the restrictions on economic activities prompted by their respective governments’ quarantine measures.
Goldman Sachs’ economics research group said: “We have cut our global GDP growth forecast to 1.25 percent for the year – less severe than the deep recessions of 1981-82 and 2008-09, but worse than the mild recessions of 1991 and 2001.”
The economy is also predicted to contract 1% or even as low as -3& by next quarter if the situation continues to get worse.