The coronavirus outbreak has brought the 海角视频 economy to a temporary standstill, according to a quarterly report.
KPMG 海角视频’s latest quarterly Economic Outlook forecasts a 2.6% decline for 2020 - with flat growth predicted in the second half of the year.
But a protracted outbreak of Covid-19 could also result in a more severe impact than the 2008-09 downturn with a 5.4% fall.
In both scenarios though, the report suggests the country’s economy is expected to recover by the second half of 2021 - assuming the public health measures put in place stem the rise in the number of cases.
Yael Selfin, KPMG 海角视频’s chief economist, said: “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 海角视频’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 海角视频 is slipping into its first significant downturn in over a decade.”
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On Friday, Chancellor Rishi Sunak said employers would be able to apply to HM Revenue and Customs to cover 80% of the wages of staff they keep on up to £2,500 a month.
It came after on Tuesday announcing a £350bn package of support measures, including a £330bn 海角视频-wide lending facility for small and large businesses.
In Wales Economy Minister on Wednesday announced a £1.4bn package of business support measures, following Mr Sunak’s announcement.
Economists have said the bill to taxpayers for the 海角视频 Government’s unprecedented scheme could run to billions of pounds a month.
The Bank of England also cut the base rate of interest to a record-low 0.1% to ease pressure during the pandemic.
Mr Selfin added: “With the 海角视频’s government charged with meeting an ambitious timetable for its post-Brexit trading relationship with the EU, the scope for further economic uncertainty this year was already high.
“However, the Covid-19 pandemic represents a far more dramatic short-term disruption to growth.
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“While both governments and central banks have moved quickly to offer fiscal and monetary policy support to the global economy, more will be needed to shore up the economy in the short term, including measures to help the most vulnerable businesses and households and prevent a deeper economic slump.
“The impact of the pandemic will be far reaching.
“It is likely Covid-19 will result in a massive expansion in government debt and this could threaten to dislodge the Government’s original vision to ‘level-up’ the 海角视频 economy, long after the pandemic is past - leaving the Chancellor with a big challenge on his hands.”