The report comes from the UN Trade and Development Agency Unctad and is based on data from the world's 5,000 largest listed companies, the Reuters news agency writes.
On average, companies have lowered their profit forecasts for the year by 9 percent due to the virus. The car industry (-44 percent) and the airlines (-42 percent) are the most affected.
"Probably at the bottom"“The revisions are probably at the bottom. The negative impact of the virus is likely to spread and intensify, ”writes Unctad in the report.
Companies' direct investment in other countries (FDI) is also affected. In January, Unctad projected an increase of 5 percent this year, but now it is believed that they can fall to the lowest level since the outbreak of the financial crisis in 2008.
Harvester economist Kenneth Rogoff, former chief economist of the International Monetary Fund (IMF), believes that the corona crisis could have a similar effect on the world economy as the oil crises of the 1970s.
The similarity lies in the fact that the disturbances come from the production side, at least to a large extent, Rogoff says; This, in contrast to the financial crisis in 2008 and many other minor crises, expressed in reduced demand, he writes in an article in the online newspaper Project Syndicate.
The return of the stagflation ghost?Rogoff notes that demand is also affected, partly because of reduced travel and increased caution savings, but then continues:
"When tens of millions of people cannot go to work (due to quarantine or fear), global supply chains collapse, borders are closed and world trade is shrinking because countries are disrupting each other's health statistics, then the supply side is hit at least as hard".
The consequence may be that the economic decline for the sake of unusualness is accompanied by increased inflation, writes Rogoff, a combination which in the 1970s was called "stagflation".
Rogoff calls on the decision-makers to be prepared and calls for a special call on the United States to contribute to international cooperation by abolishing the criminal charges against China.