UN (AP) – The global economy could shrink almost 1% this year due to the new coronavirus, a sharp reversal from the pre-pandemic forecast of 2.5% growth, the United Nations said Wednesday.

The U.N. Department of Economic and Social Affairs warned in a report that the decline could be even deeper if restrictions on economic activities extend into the third quarter of the year and if fiscal stimulus efforts don’t support income and consumer spending.

By comparison, it said, the world economy contracted 1.7% during the global financial crisis in 2009.

“Fears of the exponential spread of the virus – and growing uncertainties about the efficacy of various containment measures – have rocked financial markets worldwide,” the report noted, “with market volatility surpassing its peak during the global financial crisis and equity markets and oil prices plunging to multi-year lows.”

In the best-case scenario, the report said, moderate declines in private consumption, investment and exports will be offset by increases in government spending in the seven major industrialized nations and China, leading to global growth of 1.2% in 2020.

In the worst-case scenario, it said, global output would contract 0.9%, “based on demand-side shocks of different magnitudes” to China, Japan, South Korea, the United States and the European Union as well as a 50% decline in oil prices.

This scenario “assumes that wide-ranging restrictions on economic activities in the EU and the United States would extend until the middle of the second quarter,” the report said.