Global financial markets have been battered repeatedly since mid-February, undercutting what had been a strong start to the year.
Markets rose early in the year’s first quarter; the S&P 500 set a record with expectations that the economy was accelerating due to calming trade wars and low interest rates around the world. Similarly, the FTSE 100 Index was expected to reach 8,000 points for the first time ever.
However, overall, the first three months of the year have suffered historic losses amid the coronavirus outbreak.
The Dow Jones Industrial Average and London’s FTSE 100 saw their biggest quarterly drops since 1987, plunging 23% and 25% respectively. The S&P 500 lost 20% during the quarter, its worst since 2008.
On Monday, benchmark US crude oil announced that it had dropped by roughly two thirds this quarter and hit its lowest price since 2002.
Economists have warned the hit to the global economy is likely to be worse than the financial crisis, with forecasters for IHS Markit, for example, predicting growth will shrink 2.8% this year, compared to a 1.7% drop in 2009.
No country has been left untouched. The data firm expects China’s growth to sputter to 2%, while the UK could see growth drop 4.5%. The outlook for countries such as Italy and less developed economies is even worse.
“We remain very concerned about the negative outlook for global growth in 2020 and in particular about the strain a downturn would have on emerging markets and low income countries,” the president of the International Monetary Fund, Kristalina Georgieva, said on Tuesday.