Will coronavirus trigger a global recession? The worst is ‘still to come,’ experts warn

A global recession may be inevitable now as the world battles the coronavirus pandemic, economists say.

“In our view, the worst for the economy is still to come over the next several months,” said Joachim Fels, global economic advisor at PIMCO, CNN Business reported.

A lockdown in Italy, temporary business closures across the U.S., jittery stock markets and production halts in China, along with a drop in oil prices, all point to an economic slowdown, according to the network.

S&P Global’s economists also have predicted a worldwide recession in 2020, MarketWatch reported. They forecast global GDP growth at less than 1.5% for the year.

The COVID-19 virus, first reported in China, has swept across Asia and now has sparked new outbreaks in Europe and the United States.

More than 185,000 cases of coronavirus have been confirmed worldwide with more than 7,300 deaths as of March 17, according to Johns Hopkins University. The United States has more than 4,600 confirmed cases with at least 88 deaths.

The World Health Organization has declared the COVID-19 virus a global pandemic. In the United States, President Donald Trump has declared a national emergency.

Factory shutdowns in China, one of the world’s top production centers, have caused ripples throughout the global supply chain.

Businesses across the United States, from stores to casinos to theater chains, have closed to help curb the spread of coronavirus. Restaurants have switched to pick-up and delivery service only. Schools and government offices also are closing down.

Supermarkets are grappling with empty shelves as frightened customers stock up, but some also are ramping up hiring of personal shoppers for delivery orders.

The Federal Reserve on Sunday cut interest rates to near zero following an earlier cut to try to stabilize the economy.

But the Dow Industrial Average plunged nearly 3,000 points Monday on Wall Street in its steepest drop since the coronavirus emergency began, The Wall Street Journal reported.

“Things are not only quite bad, I would say, they’re likely worse than anything we’ve ever seen,” said Alex Blanchard, global head of repo trading at Goldman Sachs, The New York Times reported. “While it’s always difficult to compare times through history, I would say this is as bad as we’ve ever experienced.”

On Monday, Trump acknowledged the United States “may be” heading into a recession, The Hill reported. He predicted a quick turnaround once the threat of coronavirus recedes.

“I think there’s a tremendous pent-up demand both in terms of the stock market and in terms of the economy,” Trump said. “Once this goes away, once it goes through and we’re done with it, I think you’re going to see a tremendous surge.”

Economists at UCLA, however, say the United States has already entered a recession, the Los Angeles Times reported.

Economists at the UCLA Anderson School of Management released a forecast Monday saying the U.S. economy has stopped growing and will likely remain stagnant through September if the pandemic ends this summer, according to the publication.

“The length and depth of the global economic contraction depends most importantly on whether health officials can materially slow the spread of the virus via a ramp-up in testing, restrictions on mass gatherings, and quarantines of infected people as well as their contacts,” said Jan Hatzius, chief economist at Goldman Sachs, CNN Business reported.

This story was originally published March 17, 2020 at 10:19 AM with the headline "Will coronavirus trigger a global recession? The worst is ‘still to come,’ experts warn."