The world economy is now on course for its weakest year since the financial crisis as the coronavirus damages demand in China and beyond, according to analysts at Bank of America.

Global growth will slip to 2.8 per cent this year rather than the 3.1 per cent previously predicted, the slowest since 2009, economists led by Ethan Harris said in a report to clients on Thursday. China, where the virus outbreak began, is predicted to grow 5.2 per cent, the worst performance since 1990.

The economic effect of the coronavirus outbreak is starting to spread. Credit:AP

While the economists stopped short of projecting the 2 per cent pace that would spell a global recession, they warned the new forecasts imply a U-shaped trajectory for worldwide growth rather than the V-shape investors had bet on when the health scare began.

"The risks are still skewed to the downside," the Bank of America said.