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The coronavirus pandemic will cause the global economy to shrink 4% in 2020, according to a Bloomberg Economics estimate that assumes a recovery starts in the second half of the year.
The economy has “entered a downturn of unprecedented speed and severity, with most advanced economies facing their weakest performance since the Great Depression,” Tom Orlik and Jamie Rush wrote in a report. “Relative to expectations at the start of the year, the cost of lost output is more than $6 trillion,” the wrote.
That a contraction of this magnitude is based on “optimistic assumptions about both the outbreak and the recovery” underscores the challenge facing policy makers trying to cushion the blow of the pandemic. Under such scenario, U.S. gross domestic product will shrink 6.4%, while euro area GDP is set to contract 8.1%. Japan will shrink 4%, while China will expand at the slowest pace on record.
27,631 in U.S.Most new cases today
-17% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23
-1.111 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23
-0.5% Global GDP Tracker (annualized), March