"Our previous assumption that the virus will be contained in China proved optimistic, and the odds of a pandemic are rising," wrote economists from the research and consultancy arm of Moody's Corporation.
They had earlier predicted a 20% chance of a pandemic, which is defined by the World Health Organization as "the worldwide spread of a new disease."
Cumulative confirmed cases of the new disease, also known as the COVID-19, exceeded 80,000 globally, according to latest data compiled by Johns Hopkins University. China has remained the country with the most number of total cases, but in the past few days, there's been a growing number of new cases outside the mainland — including in South Korea, Italy and Iran.
"The South Korean cases, combined with the spread of new cases in Italy and Iran, indicate that while the spread in China has slowed, the virus is spreading outside of China. And the ease of its spread may bode ill for an acceleration within China as workers return to their jobs and as shops and restaurants begin to reopen," said the Moody's report.
Under Moody's previous assumption that the virus would be contained in China and largely play out by spring, the economists had projected a contraction in the Chinese economy in the first quarter, while the U.S. and global economies will experience a slowdown in growth.
But a pandemic will result in global and U.S. recessions during the first half of this year, the economists said.
"The economy was already fragile before the outbreak and vulnerable to anything that did not stick to script. COVID-19 is way off script," the economists said.
"COVID-19 came out of nowhere. It may be what economists call a black swan – a rare and inherently unforeseeable event with severe consequences," they added.