Coronavirus will lead to worldwide recession this year, warns S&P

JOHANNESBURG – International ratings agency S&P yesterday warned that the spreading coronavirus would lead to a global recession this year.

S&P said the global annual gross domestic product (GDP) for 2020 would rise a mere 1 to 1.5percent on the sudden halt in economic activity caused by coronavirus containment measures.

S&P chief economist Paul Gruenwald said the initial data from China suggested that its economy was hit far harder than projected, although tentative stabilisation had begun.

“Europe and the US are following a similar path, as increasing restrictions on person-to-person contacts presage a demand collapse that will take activity sharply lower in the second quarter before a recovery begins later in the year,” Gruenwald said.

The spread of the virus, which the World Health Organisation declared a pandemic last week, has sent markets reeling as risk-aversion rises.