Coronavirus could trigger global recession in 2020, warns Swiss Re

Global economy is getting hit much harder by the coronavirus outbreak than was previously anticipated, at a time when the economic resilience is already weak, says Swiss Re's group chief economist Jérôme Jean Haegeli.

Swiss Re's latest research anticipates a global recession in 2020 as novel coronavirus continues to spread throughout the world since its initial outbreak in China in December.

It warns that a number of G7 economies (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States) will see a recession, particularly Japan and the Eurozone.

"We forecast global growth slowing down to well below 2% this year from 2.2% in 2019, with a deceleration in particular in Japan and the Eurozone," Haegeli said.

"The risk of both a US recession and a China hard landing has also risen to a very high 40%, with US growth in 2020 now revised down 50 basis points to just 1.1%," he added.

Swiss Re stated that it foresees a further monetary easing across the board, although it will unlikely offset the economic disruption.

Overall, global risks remain to the downside, with a high likelihood of major economic reverberations throughout the remainder of the year.

"While in China the spread of the virus appears to have peaked, Italy has just been placed on lockdown, and we anticipate the situation to get worse in the US and much of Europe, before it gets better," Haegeli said.