Bloomberg revealed on Monday that global Gross Domestic Product (GDP) is expected lose around $ 6 trillion due to the coronavirus (COVID-19) outbreak.
The privately held financial data company expected the global economy to shrink by 4% this year due to the novel epidemic, assuming that the recovery will start from the second half of this year.
Bloomberg pointed out that its expectations are based on the optimistic assumption about the pandemic outbreak and the quick recovery from it.
According to economists Tom Orlik and Jamie Rush, the economy witnessed a downward trend very quickly and aggressively as most advanced economies faced their weakest performance since the Great Depression.
According to this scenario, the US economy will shrink by 6.4%, the eurozone by 8.1% and Japan by 4%, while the Chinese economy will grow at an unprecedented low level.
The report indicated that a second wave of the virus will deepen the contraction by 5.6%, and if the stimulus packages are not feasible, the global GDP would shrink by 7.2%.
“As governments move to ease nationwide lockdowns, the risk of a second wave of infections could deepen the contraction to 5.6%. If stimulus is insufficient, output could plummet 7.2%," Bloomberg wrote.
Unlike the financial crises of 1997 and 2009, the current economic shock is not caused by an imbalance in the economic and financial foundations but, by the outbreak of the pandemic, which caused a worldwide lockdown and complete closure of many businesses.
According to what the two analysts wrote, the countries that have mobilized the funds to pump them into stimulus packages for the economy will witness a rapid recovery.
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