The global health crisis sparked by the outbreak of the coronavirus is taking an extraordinarily heavy toll on the world economy. The level of world GDP is falling and for all intents and purposes we are in global recession territory. Fitch Ratings has cut its baseline global growth forecast for 2020 to just 1.3% from 2.5% in the December 2019 Global Economic Outlook (GEO), a revision that leaves the level of 2020 GDP USD850 billion lower than in the previous forecast. But we could easily see an outright decline in global GDP this year if more pervasive lockdown measures have to be rolled out across all the G7 economies. Emergency macro policy responses are purely about damage limitation at this stage but should help secure a ‘V-shaped’ recovery in 2H20, assuming that the health crisis eases.

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