Virus slump expected to rival big recessions in history

LONDON (AP) — The coronavirus-related recessions around the world are going to be bad — and for some of the world's major industrial nations the worst that anyone alive has experienced, according to analysts at Deutsche Bank.

In a wide-ranging report using data that in parts goes back 800 years, Jim Reid and Henry Allen found that the downturns are in many cases set to be deeper than those endured in the immediate aftermath of the global financial crisis 12 years ago — and then some.

Though forecasting is difficult given the prevailing uncertainties, Deutsche Bank, like others, has slashed its growth forecasts amid the coronavirus pandemic that's seen many countries impose unprecedented peacetime restrictions on economic activity.

The bank expects France, Germany, Italy, Japan, the U.K. and the U.S. to shrink by between 4% and 9% in 2020, figures that in most cases have only been eclipsed in recent decades by war and the Great Depression of the 1930s. Germany is the outlier, its economy decimated by around four-fifths around the time of the defeat of the Nazis in World War II. Nazi Germany's ally Japan saw its economy shrink by around a half in 1945.

“These are unimaginable numbers for today’s developed economies, having not been seen since World War II,” said Reid and Allen.

The only parallels in modern times, they say, would be states ravaged by war or deep crisis, like Libya or Venezuela.

The 4.2% annual decline in GDP that Deutsche Bank economists have pencilled in for the U.S. in 2020 would make 2020 the 9th largest since 1900 and deeper than anything recorded in any one year after the global financial crisis. The 9.5% quarter-on-quarter contraction Deutsche Bank expects for the second quarter in the U.S. would “easily make it the largest quarterly contraction” since 1947, the first date for...