Goldman Sachs Group Inc. strategists expect stocks to stage a powerful recovery from their worst sell-off since the 2008 financial crisis, but only after suffering more declines first.

Global equities will likely post a drop of between 20% and 25% from their peak before rebounding, the strategists said. The MSCI All-Country World Index has so far slumped 18% from its February record high through yesterday as fears about the damage from coronavirus and oil price war sent investors rushing out of risk assets.

“At this stage, we think the balance is still more in favor of this being an event-driven bear market, suggesting that the rebound in equity markets will be swift, but from a lower level,” Goldman strategists, including Peter Oppenheimer and Sharon Bell, wrote in a note dated after the U.S. market close on March 9.

While Monday’s market plunge was dramatic, the good news is that bear markets triggered by one-time shocks are milder and shorter than those caused by structural imbalances, such as financial bubbles, or economic reasons, such as higher interest rates, Goldman said.

An event-driven bear market that doesn’t result in a recession on average lasts nine months, compared with 42 months for one that is structural and 27 for the cyclical type, Goldman strategists said. Sell-offs driven by shocks, such as wars or oil price swings, usually see a recovery to the starting point within 15 months in nominal terms, compared with 111 and 50 months for structural and cyclical bear markets respectively.

After rallying 24% in 2019, the MSCI All-Country World Index is down 15% in 2020, with the sell-off wiping out about $11 trillion in market capitalization since the February record high. Global stocks rose on Tuesday, trimming some of the Monday losses, after President Donald Trump said he would announce “substantial” economic measures to combat the fallout from the coronavirus and as Germany’s banking watchdogs debated relief for lenders.

Pressure is also building on central banks around the world to step up their support measures to limit the fallout from the coronavirus. The Federal Reserve on Monday lifted the amount of temporary cash it’s willing to provide markets, less than a week since the policy makers executed an emergency interest-rate cut.

Goldman strategists note that the current market plunge is unique because no other event-driven bear market has been triggered by a virus, and coincided with such low interest rates, making it unclear whether a monetary response will be effective.

This article was provided by Bloomberg News.