S&P forecasts 2.4% drop in 2020 global GDP because of coronavirus

Global gross domestic product is expected to drop 2.4% this year as a result of the COVID-19 crisis but rebound to 5.9% growth in 2021, according to new research from S&P Global Ratings.

Eurozone and U.S. GDP should contract 7.3% and 5.2%, respectively, in 2020 and grow a respective 5.6% and 6.2% in 2021.

The new projections for 2020 are based on the agency determining "the economic impact of COVID-19 is longer and more intense than we thought," according to the research report released Thursday.

Previously, S&P Global Ratings projected global growth of 0.4% in 2020, and contractions of 2% and 1.3%, respectively, for the eurozone and U.S.

The GDP forecast for the U.K. is negative as well at a 6.5% contraction for 2020 (down from the previous projection of a 2% contraction), rebounding to 6% growth in 2021.

Still positive are India and China with projected gains in GDP of 1.8% and 1.2%, respectively, for 2020 (down from respective growth projections of 3.6% and 2.9%), and an improving 2021 for each region with growth at 7.5% and 7.4%, respectively, for 2021.

The report from Paul F. Gruenwald, chief global economist at S&P Global Ratings, also expects the U.S. unemployment rate to jump to 19% in May.

"While the very near term looks bleak, infection curves are flattening and the focus has turned to the recovery," the report said. "Its length and pace will depend on the combination of health and economic policy, the response of people and firms, and the condition of the labor market and small and medium enterprises."