The global economy is expected to contract 1.5 per cent in 2020 amid the ongoing COVID-19 outbreak, according to the forecast released by the Institute of International Finance (IIF) on Monday.
The IIF said, "We cut our global growth forecast from 2.6 to 0.4 per cent in the last two weeks, but the building COVID-19 pandemic, the OPEC price war and mounting credit stress in advanced and emerging markets continue to reshape the picture in fundamental ways," reports Xinhua.
"Our global growth forecast now stands at -1.5 per cent, with a contraction of 3.3 per cent across mature markets and growth of only 1.1 per cent" in emerging markets, the report said, adding there is "huge uncertainty" about the economic impact of coronavirus (COVID-19).
"It is as of now unclear how long de facto shutdowns in many countries must last to contain the virus. And given the severity of the shock, it is also unclear if consumer and investment activity rebounds quickly once quarantines are lifted," the report said.
The report also suggested that both the United States and the euro area are already in recession, with negative growth in the first quarter and large contractions in the second quarter.
For the whole year, growth rates in the United States and the euro area are expected by the IIF to contract 2.8 per cent and 4.7 per cent, respectively.
The IIF, based in Washington DC, is a global association of the financial industry with more than 450 members from more than 70 countries and regions.