Neil Shearing, a Chief Economist at Capital Economics, analyzes the implications of the coronavirus outbreak for the global economy.

Key quotes

“We think most economies will suffer falls in GDP of between 10-20% q/q in the first or second quarter of this year.”

“We’ve marked our forecast for global GDP in 2020 down from +2.9% y/y to -1.0% y/y.”

“Our working assumption is that most economies will return to their pre-crisis path of GDP within a couple of years, albeit with some permanent lost output in the meantime.”

“Our view is that deflation poses a much greater risk than inflation in the short term.”