Economists at trade credit insurer, Atradius forecast a 5% contraction in global GDP in 2020 followed by a recovery circa 6.5% in 2021, the pace of which remains highly uncertain and directly linked to the lifting of lockdown measures.

In the UK, GDP is expected to fall 14% in Q2 with a drop in consumer spending of almost 20%. In the second half of 2020, recovery is expected with a decline in GDP of 10.8% before a return to growth of 10.2% in 2021.

Across advanced markets, a GDP contraction of 6.6% is forecast in 2020 with a 6.0% recovery anticipated in 2021. The firm believes that all major emerging economies, except China, will face a recession in 2020. It further expects global trade to shrink 15% this year.

The company's baseline forecast assumes that either a vaccine will be developed or that world economies will adapt to the new norm of social distancing in an economically viable way.

Regional director for UK and Ireland, Stuart Ramsden said: "The rapid spread of COVID-19 across all markets is taking a heavy economic toll on both advanced and emerging economies. Lockdowns reduce consumption opportunities and create supply-side shocks as a large number of businesses are not able to operate. This has set the global economy on the path for a recession which is likely to be deeper than that of the 2008 financial crisis. During this unique period, detailed attention to credit management is essential to success.”

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