Coronavirus Poses Largest Threat to Global Economy Since Great Recession
MAR 2, 2020 - 7:00 am
The coronavirus Covid-19 presents the global economy with its greatest danger since the financial crisis, according to the OECD’s latest Interim Economic Outlook.
Covid-19 is spreading from China to other regions causing human suffering and economic disruption. It is raising health concerns and the risk of wider restrictions on the movement of people, goods and services, falls in business and consumer confidence and slowing production.
The Interim Outlook presents both a best-case scenario in which the extent of the coronavirus is broadly contained and a “domino” prospect of contagion that is more widespread.
In both cases, the OECD calls on governments to act immediately to limit the spread of the coronavirus, protect people and businesses from its effects and shore up demand in the economy.
Even in the best-case scenario of limited outbreaks in countries outside China, a sharp slowdown in world growth is expected in the first half of 2020 as supply chains and commodities are hit, tourism drops and confidence falters. Global economic growth is seen falling to 2.4% for the whole year, compared to an already weak 2.9 % in 2019. It is then expected to rise to a modest 3.3% in 2021.
Growth prospects for China have been revised down sharply to below 5% this year after 6.1% in 2019.
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