According to sources a global recession is likely if COVID-19 becomes a pandemic, and the odds of that are uncomfortably high and rising with infections surging in italy and korea, moody's Analytics said on Wednesday.
In a commentary on the impact and scenarios of the coronavirus, Mark Zandi, Chief Economist at moody's Analytics said that the coronavirus has been a body blow to the Chinese economy, which now threatens to take out the entire global economy.
moody's Analytics said A global recession is likely if COVID-19 becomes a pandemic, and the odds of that are uncomfortably high and rising with infections surging in italy and Korea. The US economy is more insulated from the impact of the virus, but it is not immune, and it too would likely suffer a downturn in this scenario. The moody's Analytics baseline scenario assumes the outbreak remains contained to china and largely plays out by the spring.
Moreover the assumption that the virus will be contained to china appears increasingly tenuous, and the odds of a pandemic are rising. The US agency said we previously put the odds of a pandemic at 20 per cent but we now put them at 40 per cent. Apparently a pandemic will result in global and US recessions during the first half of this year. moody's Analaytics added We all hope this black swan will not fly, but it is prudent to be prepared if it does.
