Will coronavirus trigger a global recession? | Jeffrey Frankel

World economy's prospects look bleak owing to Covid-19 outbreak and Donald Trump's trade policy

At the start of this year, things seemed to be looking up for the global economy. True, growth had slowed a bit in 2019: from 2.9% to 2.3% in the US and from 3.6% to 2.9% globally. Still, there had been no recession and as recently as January, the International Monetary Fund projected a global growth rebound in 2020. The new coronavirus, Covid-19, has changed all of that.

Early predictions about Covid-19's economic impact were reassuring. Similar epidemics - such as the 2003 outbreak of severe acute respiratory syndrome (Sars), another China-born coronavirus - did little damage globally. At the country level, GDP growth took a hit but quickly bounced back, as consumers released pent-up demand and firms rushed to fill back orders and restock inventories.

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