The speed with which the coronavirus pandemic has sped around the globe has compelled credit rating firm Fitch Ratings to make further sharp cuts to its gross domestic product (GDP) forecasts. The agency said Thursday that its baseline forecast for 2020 now calls for a “deep global recession.”

Fitch now expects global economic activity to decline by 1.9% in 2020. The latest International Monetary Fund (IMF) projection of 2019 global GDP growth is 2.9%.

Economic activity in the United States is forecast to decline by 3.3%, while the eurozone’s decline is expected to be 4.2% and that in the United Kingdom is pegged at 3.9%. GDP growth in China now expected to be less than 2%, compared to a January IMF estimate of 6% growth in 2020.

Fitch’s chief economist, Brian Coulton, said, “The forecast fall in global GDP for the year as a whole is on a par with the global financial crisis but the immediate hit to activity and jobs in the first half of this year will be worse.”

The effects of the lockdowns in Europe, the United States and elsewhere were not included in Fitch’s March global economic forecast. The firm now estimates that the lockdowns will slice 7% to 8% from U.S. and eurozone GDP in the second quarter of 2020. That implies an annual decline in the range of 28% to 30% in economic activity.

According to Fitch, nationwide lockdowns appear to reduce economic activity by about 20%. The full impact of the lockdowns depends on the length of time that economic activity is curtailed, and the longer the lockdowns, the slower the ultimate recovery.

To a large degree that slow recovery results from the amplification of the lockdown impacts on employment, capital spending and consumer spending on discretionary goods and services. Fitch expects the U.S. unemployment rate to peak in the second quarter at 10%, implying 10 million job losses. All this worsens the recent collapse in equity prices.

Fiscal stimulus packages like the $2.2 trillion U.S. CARES Act “can play an important part in cushioning the fall in activity,” Coulton commented. But longer-lasting growth from the stimulus is “unlikely to be seen until the health crisis subsides.”

If the health crisis does ease in the second half of this year, Fitch expects to see a “marked rebound in growth.” Fitch’s Coulton noted, “Our baseline forecast does not see GDP reverting to its pre-virus levels until late 2021 in the US and Europe.”

Fitch’s forecast includes a two- to three-month crisis that includes a strictly enforced five-week national lockdown period. If the health crisis forces an eight-week lockdown, GDP could fall by another 2% and delay recovery past the end of 2021. U.S. job losses could total 40 million.

It could be worse. Fitch concludes, “A failure to contain the virus would result in even more adverse outcomes.”

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