The coronavirus pandemic "has morphed into a credit crisis and economic recession," Bank of America (B of A) outlined in its World at a Glance report released Thursday, noting that "the current sudden stop of the real economy on a global scale is unprecedented and the risk is that this crisis may end up even worse than the 2008-09 crisis," making "the market very challenging to forecast."
B of A forecasts that the "virus shock" will likely lower real GDP growth in China in 2020 to 1.5% year-on-year, down from its previous forecast of 4.6%.
"While we still expect China to achieve a quick turnaround in capacity ratio from the second quarter onwards, the disruptive impact in Q1 was reassessed," the report's analysts concluded. "In particular, we think real GDP growth will plummet to -6.0% year on year in the first quarter of 2020 from 6.0% in the fourth quarter of 2019, showing a much deeper V on the quarterly path."
The bank's real GDP growth forecasts year-on-year for 2020 include:
U.S.: -0.8%
Euro Area: -1.7%
Japan: -2.6%
South Korea: 0.7%
Hong Kong: -4.0%
Malaysia: 1.2%
Singapore: -2.8%
Taiwan: 1.1%
Thailand: -2.4%
Russia: -1.0%
South Africa: -0.2%
Turkey: 2.5%
Kazakhstan: 1%
Nigeria: 0.5%
Saudi Arabia: 2.4%
Ukraine: -1.1%
Argentina: -3.0%
Brazil: -0.5%
Mexico: -4.5%
Chile: -0.7%
Colombia: 1.6%
Peru: 0.5%