Aviva Investors braces for 'deep global recession in 2020'

Up to 20% drop in global activity 'plausible'

The coronavirus pandemic is set to lead to the "deepest global recession of the post-war period", according to Aviva Investors, which has boosted allocations to governments bonds, and moved to "a more cautious currency allocation" and an equity underweight position.

In a statement, Aviva Investors said while it is "impossible to forecast" the depth of the economic crisis, a decline in global activity of between 10% and 20% in the first half of 2020 "is plausible". The firm explained the "unprecedented monetary and fiscal policy response" seen globally "can only cushion the blow" and "there will inevitably be some longer-term impairment". Explaining the firm's positioning, Aviva Investors head of investment strategy and chief economist Michael Grady said: "We have increased our preference to be overweight government bonds, reflecting our view cent...