The global economy is expected to shrink by 0.5% in 2020, as coronavirus, Moody’s, the US-based rating agency, had a negative impact late Wednesday.
The agency’s previous forecast (November 2019) for this year was 2.6%, according to a press release.
However, the financial services company expected the global economy to grow by 3.2% in 2021.
Although central banks had reacted quickly, “volatility in the financial sector had exploded to the level most recently seen during the global financial burden in 2008”.
“The stress in the financial markets reflects the deep concern and uncertainty about the real economic costs that households and businesses around the world will be facing,” the statement said, adding that job losses worldwide in the coming months will increase.
“The longer these conditions last, the more they would potentially promote self-sustaining recession momentum and uncover existing weaknesses in the real economy and financial sector,” he added.
Moody’s forecast for advanced economies is negative 2% for 2020 and positive 1.9% for emerging markets. A decline of 2.2% is expected for the Eurozone.
The agency, which expects negative growth rates for almost all G20 countries in 2020, predicts that the Turkish economy will shrink by 1.4% in 2020 and grow by 0.8% in 2021.
After first appearing in Wuhan, China last December, the infection has spread to at least 175 countries and areas.
The number of confirmed cases worldwide has exceeded 472,000, while the death toll is over 21,300, according to the latest figures from US-based Johns Hopkins University.
The virus has caused several countries to enforce a ban: closure of schools and universities, markets, shopping centers, restaurants, and cessation of air and land transport.