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Economists at Rabobank have updated their growth forecast for the global economy and are predicting the Eurozone will see a recession as well. Monetary and fiscal policies to help but not to prevent the crisis.

Key quotes

“The coronavirus outbreak has led us to reduce our global growth projections; a global recession for 2020 (<2.5% y/y) is now all but certain.”  

“We now expect the virus outbreak to pull the Eurozone into a recession as well.  Eurozone growth is projected to fall to around 0.2%, with zero or negative growth in Q1 to Q3 followed by a mild recovery.”

“Inflation is likely to be volatile as supply and demand shocks work in opposite and asynchronous ways, but ultimately we expect downward pressure on inflation to prevail.”

“Monetary and fiscal policymakers are working on measures to ease pressure on the economy. While measures are unlikely to prevent a recession, especially targeted measures for cash-strapped households and businesses can help to alleviate the immediate economic damage from this shock and prevent the situation from deteriorating quickly.”