March 23, 2020 / 7:38 AM / 9 days ago

Goldman Sachs sees 1% drop in global GDP due to 'coronacrisis'

FILE PHOTO: An aerial photo shows the Seoul Express container ship docked at Harbor Island at the Port of Seattle in Seattle, Washington, U.S. March 21, 2019. REUTERS/Lindsey Wasson/File Photo

LONDON (Reuters) - Goldman Sachs said it expected global real gross domestic product to contract by about 1% in 2020, a sharper economic decline than in the year following the 2008 global financial crisis.

Global governments have been taking unprecedented measures to contain the coronavirus outbreak which is threatening to spark a worldwide economic contraction.

“The coronacrisis — or more precisely, the response to that crisis — represents a physical (as opposed to financial) constraint on economic activity that is unprecedented in postwar history,” the investment bank said in a note to its clients published late on Sunday.

It sees the real GDP in advanced economies contracting “very sharply” in the second quarter, including a 24% drop in the United States, a whopping two-and-a-half times as large as the previous postwar record.

Reporting by Thyagaraju Adinarayan, editing by Karin Strohecker

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