The risks of a recession have increased due to the further spread of the new corona virus worldwide. Where the virus outbreak seemed to be primarily a Chinese issue, the disease is now spreading rapidly around the world. This disrupts both the demand for products and the supply, which, according to credit rating agency Moody’s, has increased the risk of economic contraction in many countries.
According to Moody’s, Italy is already in a recession. The rapid spread of the corona virus in the economically important north of the country has almost certainly caused further shrinkage, after the gross domestic product also fell in the last quarter of 2019. For the whole of 2020, Moody’s expects the Italian economy to shrink by 0.5 percent.
According to Moody’s, growth in the euro zone this year will amount to 0.7 percent, while 1.2 percent was predicted last month. The credit rating agency also reduces the growth forecast for the world’s largest economy, the United States. All in all, this means that global growth is 0.3 percentage points lower than previously estimated.