LONDON (Reuters) – The crippling economic impact of the coronavirus is set to push the world’s poorer countries excluding China into recession by the middle of the year, U.S, investment bank JPMorgan warned on Thursday.
“We now expect a 1H20 recession in emerging markets ex-China as containment is stepped up and as developed markets contract,” the bank said.
The impact on Latin America (-12%) and Europe, Middle East and Africa (-13%) is expected to mark the biggest single-quarter declines in these regions since 2008-09 in the coming months.
Turkey’s 17.2% and Mexico’s 15.5% q/q annualized growth collapse is likely to be the largest in emerging markets in the second quarter with central and eastern European economies not far behind.
Some of the biggest losses are seen in EMEA EM where aggressive social distancing measures and Euro area linkages are expected to cause a permanent loss of 3%-pts in the level of economic output this year.
In Latin America, Colombia, Brazil and Mexico are expected to suffer the largest GDP hits for the year as a whole, all close to 3%-pts on 4Q/4Q basis, the bank added.
(Reporting by Marc Jones; Editing by Tom Arnold)