The world economy is expected to contract by 0.5% in 2020 due to the negative impact of coronavirus, Moody's, the U.S. based credit rating agency announced late Wednesday.
The agency's previous forecast (November 2019) for this year was 2.6%, it said in a press release.
The financial services company, however, said it expected the global economy to grow by 3.2% in 2021.
It said that although central banks had responded quickly, the "financial sector's volatility has exploded to levels last seen during the 2008 global financial stress."
"The financial market stress is a reflection of deep anxiety and uncertainty around the real economic costs that households and businesses around the world will bear," the statement said, adding that job losses will increase globally in the next few months.
"The longer these conditions persist, the more they would potentially feed self-sustaining recessionary dynamics, and expose existing vulnerabilities in the real economy and financial sectors," it added.
Moody's forecast for advanced economies is negative 2% in 2020 while positive 1.9% for emerging countries. It expects a decline of 2.2% for the eurozone.
The agency, which expects negative growth rates in 2020 for almost all G20 countries, forecasts 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 territories.
The number of confirmed cases worldwide has surpassed 472,000 while the death toll is over 21,300, according to the latest figures by the U.S.-based Johns Hopkins University.
The virus has made several countries enforce a lockdown: shutting down schools and universities, markets, malls, restaurants, as well as suspending air and land traffic.
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