The new coronavirus has reshaped the global economic outlook for at least the next couple of quarters. From what data are available, it looks like the hit has been big enough for global GDP to contract this quarter. So, where the euro-zone crisis, China hard-landing fears, the Fed’s botched tightening cycle and the trade war failed to bring the world economy’s growth streak to an end, the coronavirus looks set to succeed. However, as long as containment measures are further relaxed in the coming weeks, we think that activity in affected countries will rebound in Q2 and the global recovery will get back on track. Indeed, before the virus outbreak, global economic indicators were either stabilising or picking up.
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