The coronavirus outbreak could leave the world economy in its worst state since the global financial crisis, with economic activity tipped to shrink through the first quarter of the year as manufacturing and travel falters.

With the International Energy Agency (IEA) predicting the first drop in global oil demand in a decade, analysts downgraded their expectations for the global and Australian economies as the fallout from the virus becomes clearer.

There are new warnings the coronavirus outbreak will see the global economy contract through the March quarter of this year, the worst performance since the depths of the global financial crisis. Credit:Getty

Global growth had been tipped to lift this year, partly due to an easing of the US-China trade war and the resolution of Britain's Brexit vote.

But Capital Economics said it now appeared global growth would suffer a sharp slowdown in the first three months of 2020, driven by the virus outbreak.