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Virus to cause global recession: S&P

Marc Jones
S&P Global forecasts a global recession and a spike in US corporate defaults amid COVID-19's spread

The sudden economic stop caused by coronavirus containment measures will cause a global recession this year and could result in US corporate default rates spiking above 10 per cent in the next 12 months, ratings agency S&P Global says.

"The sudden economic stop caused by COVID-19 containment measures will lead to a global recession this year," S&P said in a report on Tuesday.

A cash flow slump and much tighter financing conditions as well as the simultaneous oil price shock will hurt creditworthiness, it added.

"These factors will likely result in a surge in defaults, with a default rate on non-financial corporates in the US that may rise above 10 per cent and into the high single digits in Europe over the next 12 months."