FXStreet notes that the coronavirus outbreak has now evolved into a pandemic with serious consequences for the world economy. Analysts at Nordea outline three scenarios for the global economy.

“The baseline scenario: the initial shock to global economic activity will be huge, probably at least comparable to the two worst quarters during the global financial crisis. We expect global growth to be around -1% in 2020 followed by +5.5% in 2021 in the U-shaped baseline scenario.” 

“The upside risk scenario: the positive risk scenario looks much like the baseline U-shaped scenario, but the recovery is faster, like a V-shape. We expect global growth to end around 1% in 2020 and 6% in 2021.”

“The downside risk scenario: several risks have the potential to make any eventual recovery very gradual and seem more like an L-shape than a U-shape.”