LONDON, United Kingdom — As measures to stem the coronavirus pandemic have pushed the global economy into recession, the sudden economic stop will bring intense credit pressure to bear on borrowers worldwide as slumping cash flows and tight financing conditions weigh on creditworthiness.

That’s according to a report titled “Global Credit Conditions: Triple Trouble: Virus, Oil, Volatility,” published today by Standard & Poor’s (S&P).

The report said credit conditions across regions are as gloomy as they’ve been since at least the Great Financial Crisis more than a decade ago.

“While China has shown some signs of emerging from the current crisis, having contained the outbreak, Europe and the US aren’t yet past the peak. We’ve also yet to see the full effects on vulnerable emerging markets,” said the report.

The top risks according to S&P Global Ratings’ Credit Conditions Committees, include:

• Coronavirus-containment measures fail;

• Financial- and commodities-market volatility worsens; and

• Demand drop-off persists and supply disruption escalates.

“The pandemic is pressuring the funding environment at a time when earnings for some sectors will plummet under the strain of supply-side disruptions and tanking demand,” said Alexandra Dimitrijevic, Global Head of S&P Global Ratings Research.

“Combined with the historic collapse in oil prices, and record volatility in the markets, this puts significant pressure on creditworthiness around the world,” added Dimitrijevic.

The report said massive policy responses from central banks and governments around the world will likely soften the blow, particularly with regard to financial market liquidity.

“However, while a severe but relatively short recession (our base case) will mostly affect weaker credits or those in directly exposed sectors, a protracted slump would have broader implications.

“It’s worth noting that the economic damage associated with the outbreak is non-linear. That means, for example, that if containment takes twice as long as expected, the economic damage will be more than twice as bad, and, therefore, recovery could take longer and be shallower (with more lost output) than projected,” said the report.