The Business Magazine - B2B Business News - Site Logo
The Business Magazine March 2024
Read now
PICK YOUR EDITION

South: KPMG warns of severe contraction in coronavirus crisis

23 March 2020
Share
Reading: Avignon Capital buys retail unit for £3.2m

The impact of the COVID-19 virus is expected to see the UK economy contract by 2.6% in 2020, according to KPMG UK’s latest quarterly Economic Outlook, but a protracted outbreak could result in a more severe impact than the downturn experienced in 2008-09. The economy is expected to recover by the second half of 2021 at the latest under both scenarios.

KPMG’s main scenario assumes the public health measures put in place around the world stem the rise in the number of cases by the summer. In this case, it is expected that the economy remains flat in the second half of the year with a strong recovery in the first half of 2021, as uncertainties around the pandemic dispel. This would see UK GDP fall by 2.6% this year, then grow by 1.7% in 2021. However, if the pandemic persists until the second half of next year, GDP could contract by 5.4% this year and by another 1.4% in 2021.

With so much uncertainty about how COVID-19 will develop in the weeks and months ahead, KPMG’s latest forecasts are based on a range of scenarios. However, even in its main one, the effects of the pandemic on global economic growth, consumer spending and business investment in particular, will still be highly significant.

Andrew Morgan, senior partner for KPMG in Reading, commented on the report: “The COVID-19 pandemic is first and foremost a human crisis but there will also be a very substantial negative impact on the global economy and the UK’s economic performance this year and potentially next, but the economy is expected to recover by the second half of 2021.

“Until we know how and when the COVID-19 outbreak will end, the scale of the negative economic impact will be difficult to quantify. However, it is now almost certain that the UK is slipping into its first significant downturn in over a decade.”


Related topics

Related articles

Upcoming events

view more
06
Jun

South Coast Property Awards 2024

Hilton Southampton
Utilita Bowl
More info
18
Jul

Thames Valley Tech & Innovation Awards 2024

Reading FC Conference & Events
Select Car Leasing Stadium, Reading
More info
12
Sep

Thames Valley Property Awards 2024

Ascot Pavilion
Ascot Racecourse
More info
03
Oct

South Coast Tech & Innovation Awards 2024

Hilton Southampton
Utilita Bowl
More info
07
Nov

Thames Valley Deals Awards 2024

Reading FC Conference & Events
Select Car Leasing Stadium, Reading
More info

Related articles