China could easily enter a technical recession as the country's coronavirus outbreak weighs on growth, an economist told CNBC Tuesday.
Speaking to CNBC's "Street Signs," Diana Choyleva, chief economist at Enodo Economics, said the virus had come at "a very bad time for China."
"Not only has growth slowed down significantly in the second half of last year, but this year was going to be the crunch time for trying to sort out China's very large bad debt problem," she explained.
Choyleva said that based on Enodo's estimates, credit losses arising from the Chinese coronavirus were likely to amount to 20% of the country's gross domestic product (GDP). She also noted that the shutdown of the Hubei province — where the virus was first reported — was "unprecedented" and "severe."
"The impact on the economy's going to be much bigger than SARS," she told CNBC. She added that her company had been calculating China's growth numbers since 2005, and the second half of 2019 had seen an annualized rate of just over 3%.
"So when we then estimate what the impact's going to be like, even on the assumption that it will be a repeat of SARS — I think it will be worse — we could easily get into a technical recession in China in the first half of this year," Choyleva added.
A technical recession is defined as two consecutive quarters of GDP contraction. China's economy grew 6.1% in 2019, marking its slowest GDP growth since 1990, with the world's second-largest economy recording GDP growth of 6% for the fourth quarter.
Meanwhile, Pantheon Macroeconomics Chief Asia Economist Freya Beamish said Chinese growth for the first quarter could fall to "less than 2%" year-on-year as a consequence of the shutdowns being enforced to curb the spread of the new coronavirus.
"It's quite a shocker," she told CNBC on Tuesday. "It is a serious impact that we're seeing in the first quarter of this year at least."
Aneeka Gupta, associate director of WisdomTree, added that she expected the fallout from the outbreak to continue for some months.
"The coronavirus spread is the new unknown that the markets are fearing," she told CNBC on Tuesday. "We believe at least for the next two, three months, there's going to be more pain than gain, and there's a high likelihood that investors are going to be investing in more safe-haven assets as opposed to there being a more risk-on environment."
It came after the U.K.'s Health Secretary Matt Hancock said in Parliament on Monday that the new coronavirus "will be with us for some months to come."
However, Eduardo Lecubarri, global head of small and mid-cap equity strategy at JPMorgan, said Tuesday that although it was difficult to tell how long the virus would weigh on markets, he did not see the threat being long-lasting.
"We've seen how this starts, we don't know how this is going to end," he told CNBC's "Squawk Box Europe." "Common sense kind of dictates that this is a short-term, temporary drag to growth."
Coronaviruses are a large family of viruses that can sometimes spread from animals to humans and cause a range of illnesses, according to the WHO. The new strain of coronavirus was first reported in the Chinese city of Wuhan on December 31.
Chinese authorities confirmed on Tuesday that 425 people had died of the disease in China, while the total number of cases in the country had risen to 20,438.