deVere Group founder and CEO Nigel Green has opined that the current COVID-19 might just trigger a global recession, The Herald reports.
Green further urged investors to make moves to protect their interests against the economic impact of the outbreak.
Green opined:
The outbreak is developing and evolving quickly and no-one accurately can predict what will be the economic fallout.However, I believe that based on what we currently know, the risk of a coronavirus-driven short, sharp global recession this year is significantly growing.
The epidemic has already dented anaemic global economic growth this year and it can be expected to slow further, then contract, as the fear of the virus takes hold.
The outbreak has already sent the stock market into bouts of volatility not seen since the 2008 financial crisis, severely disrupted global supply chains, shuttered factories, grounded flights, closed attractions and cancelled major events.
Entire powerhouse cities in Asia and Europe are nearly shut down. Multinational companies have warned that coronavirus will severely hit profits. Workers are being evacuated and forced to work from home and to avoid travelling.
We can see both supply and consumer demand are already being impacted in key sectors, such as travel and tourism, hospitality, manufacturing and retail, and it is going to extend to others.
This scenario is then likely to feed on itself: a lack of consumer confidence and spending, lack of business investment, more job cuts, which means even less spending and demand, which leads to further job cuts.
Unfortunately, companies already on the edge are likely to fold as we have seen this week. Against this backdrop, we should prepare for a short-term but severe global recession.
However, the world economy is likely to bounce back strongly. We could even see revived global growth as economies rebuild and adapt; and especially so if central banks and governments step in to actively kick-start growth.
The short-term economic impact of coronavirus is likely to affect capital markets, which in turn affects investor returns.
Coronavirus has shifted the landscape. Investors are urged to review their portfolios to ensure that they are still on track to create, build and generate wealth.
More: The Herald