"I find it very hard to think we're not going into a global recession," said Karen Ward, London-based chief market strategist for Europe, the Middle East and Africa at J.P. Morgan Asset Management. "The very initial data we're going to get for Q2 are going to be horrific — numbers we've never seen before in terms of the GDP collapse. The single-quarter numbers will make 2008 look like it was a doddle."
Growth in 2009, during which the global financial crisis came to an end, was -0.4%, according to In-ternational Monetary Fund data.
A 1% to 2% contraction is forecast for the global economy in 2020, said Mauricio Vargas, senior global economist at Union Investment Institutional GmbH, based in Frankfurt. "I think the coronavirus is a fundamental game-changer for the economy."
Union Investment expects lockdown measures to depress private consumption at a rate of around 30% to 40%, assuming such strict restrictions are in place for most of the developed world for at least four to five weeks. "And there's a very big downside risk that if the containment measures have to be in place for a much longer time. Every week of containment and lockdown … counts for 0.7% to 1% of GDP," Mr. Vargas said.
Economists at other money managers agree that a global recession is in the cards.
"We are headed for a global recession, there are no doubts about that," said Peter van der Welle, strategist at Robeco Institutional Asset Management in Rotterdam, Netherlands.
While it's a concern that global markets are headed into a recession in 2020 overall, with some expecting growth to fall into negative territory, economists are generally accepting of that fact. Forecasting just how deep and lasting the recession could be is a bigger problem.
"Knowing Q2 is going to be pretty dire isn't really the problem; the question really is, what does Q3 and Q4 look like?" Ms. Ward said.
One factor in answering that question is how many times lockdown measures and the disruption to general life and workforces occur as a result of the virus.
"The economic question we're grappling with is, how many shutdowns?" said Richard Barwell, head of macro research at BNP Paribas Asset Management in London. "If it is one and done, we have an economic response once: There is pain and we socialize that cost. But if there are multiple shutdowns, we are paying that price or socializing that cost every time. We're looking for good news about antivirals, diagnostic and serological tests and herd immunity, because that is what will give us a little more confidence that (we) won't have to pay this cost twice or thrice."