Currently, JPMorgan expects the global economy will shrink in the first quarter in the aftermath of the outbreak of coronavirus.
The Bank’s economists, previously slashing its growth forecast c 2 to 1.3 percent on an annual basis, estimated that global GDP will shrink by 0.1 percent in the first three months of 2020, mainly due to the reduction in volumes in China of 3.9 percent. “If this is implemented, it will be the first time, global growth will stop outside of a recession“.
From the outset we expected that the outbreak will significantly reduce the GDP of the current quarter, but two recent events indicate that we are waiting for a greater-than-expected decline. First, our daily tracking of the indicators shows that the recovery in China is slower than expected and that the return to normal use in industry will be postponed at least until next month. Second, the virus is now spreading to Western Europe and other parts of Asia. Infection the United States also now appears to be inevitable, even if the relative value of proliferation are far from clear.