S&P forecasts 2.4% drop in global GDP
Credit rating agency S&P Global slashed its global forecasts, predicting coronavirus lockdowns would now see the world economy contract 2.4% this year and cause the United States and euro zone to slump 5.2% and 7.3% respectively.
Though the projections were not as dramatic as the 3% global contraction forecast by the International Monetary Fund earlier in the week, S&P’s move is likely to fan worries about further sovereign and corporate rating downgrades.
"The data flow reflecting the economic impact of measures to curb the spread of COVID-19 has gone from bad to worse," S&P’s top global and regional economists said in a new report.
"We now see global GDP falling 2.4% this year, with the U.S. and euro zone contracting 5.2% and 7.3%, respectively. We expect global growth to rebound to 5.9% in 2021," Reuters cited the report as saying.