Emanuele Cremaschi/Getty Images

A new economic-growth estimate from JPMorgan projects that a recession will hit the US and European economies by July.

The bank said its views of the coronavirus outbreak "have evolved dramatically in recent weeks." JPMorgan economists now expect US GDP to shrink by 2% in the first quarter and 3% in the second.

Eurozone GDP could contract by 1.8% and 3.3% over the same periods, the economists added.

The "sudden stop" to economic activity through quarantines, event cancellations, and social distancing contributed to the downward revision, alongside recent weeks of financial-market chaos.

"As we resign ourselves to the inevitability of a large and broad-based shock," nations' economic policy responses are key to preventing an even longer downturn, the economists added.

Visit Business Insider's homepage for more stories.

The US's biggest bank expects the coronavirus pandemic to sink the US and European economies into a deep recession as soon as this summer.

JPMorgan's views of the virus "have evolved dramatically in recent weeks" as the outbreak has spread further around the world and fueled the worst stock-market sell-offs in decades, the bank's economists wrote in a Thursday note.

The US economy could shrink by 2% in the first quarter and 3% in the second, JPMorgan projected, while the eurozone economy could contract by 1.8% and 3.3% in the same periods.

A technical recession is defined as two consecutive quarters of negative gross-domestic-product growth. The bank's emerging-markets economists haven't updated their growth estimates, but "evolving news on the virus and the material tightening" in those markets' financial conditions make it "reasonable to expect further downward revisions" in global first-half GDP, the economists wrote.

Read more: Goldman Sachs studied every bear market in stocks since 1835 — and concluded that 3 red flags make this coronavirus-driven one unlike any other in history

The outbreak was initially deemed a short-lived but disruptive shock to world economies, but two key developments led the bank to brace for a "much sharper" contraction in the first half of the year and a "novel-global recession."

The economists first cited the "sudden stop" to economic activity created by quarantines and social-distancing measures around the world. Italy, where the number of cases has surpassed 15,000, is in lockdown, and numerous countries, including the US, have banned some travel to curb contagion. The cancellations of major sporting, cultural, and business events will further cut into consumer spending, and the uncertainty surrounding the virus will make a coordinated economic restart even more difficult, the economists said.

Financial markets' wild price swings and tumbling asset prices will also contribute to economic contraction over the next two quarters, according to JPMorgan. Financial conditions around the globe are "tightening sharply as perceptions of credit quality" across several assets deteriorate, the economists said. The risk of sovereign and corporate debt crises adds to the firm's already dire economic outlook.

Read more: Famed economist David Rosenberg called the housing bubble. Now he tells us why the oil-price war will be more damaging than the coronavirus — and outlines a scenario where stocks plunge another 13%.

The key to avoiding an even worse hit to global growth lies in countries' policy responses, the bank's economists said: Authorities need to target ailing sectors with stimulus measures, limit financial-market stress, and prop up consumer demand through monetary policy. Any shortfall risks a recession lasting throughout 2020, the firm added.

"As we resign ourselves to the inevitability of a large and broad-based shock to global growth, the key issue is whether we can avoid a traditional and longer-lasting recession event," JPMorgan wrote.

Now read more markets coverage from Markets Insider and Business Insider:

Dow rebounds more than 800 points a day after tanking the most since 1987 on coronavirus worries

Investors stockpiled a record $137 billion of cash in just 5 days as coronavirus fears sent them fleeing from risk

Goldman Sachs studied every bear market in stocks since 1835 — and concluded that 3 red flags make this coronavirus-driven one unlike any other in history

NOW WATCH: Why hydrogen cars will be Tesla's biggest threat