Banks and global institutions have come out to warn that the recession that has gripped the world could be far worse than predictions made just weeks ago as the spread of the virus has been far worse than their expectations.
Luigi Speranza, chief global economist and Marcelo Carvalho, head of global emerging market research said that the impact of the coronavirus was far worse than the bank had earlier predicted in a note on March Globally, the number of infections has reached 2 million with more than , dead as of Wednesday April There is not yet a cure or vaccine. The bank predicted a The Swiss bank said it was a sharp contrast to the events in when the global economy contracted by as much as 6.
The IMF which had in January predicted that the global economy would expand by as much as 3. Although IMF came out to say that it was anticipating a 5. Gopinath said. Adding that there have been worse cases than this with Estonia, Turkey and Ireland in the past but global average is 5.
This does not come as surprise as Thailand has already come out to warn that as many as 10 million people could fall into unemployment. This leaves many people with no safety net and exposed to the economic crisis. The virus that has left companies idle has the potential to create unprecedented employment outcomes as was evident from the surging claims of unemployment in the United States and Canada over the past few weeks.
The hospitality sector was something that UBS said it was worried about, as it will be the sector that would be impacted the most. JP Morgan said that US GDP could fall 40 per cent in the second quarter from the previous year with unemployment spiking to 20 per cent. The world has seen money being pumped into the system like never before with UBS revealing that stimulus packages have reached 2. This time around though the PBOC has not stepped in and questions are being raised on what was behind this move.
