The global economy could grow at its slowest rate this year since 2009 due to the coronavirus outbreak, says the Organisation for Economic Cooperation and Development.
The think tank has forecast growth of just 2.4% in 2020, down from 2.9% in November. However, it warned that a prolonged and “more intensive” outbreak could halve growth to 1.5%.
“The main message from this downside scenario is that it would put many countries into a recession, which is why we are urging measures to be taken in the affected areas as quickly as possible,” said Laurence Boone, the OECD's chief economist.
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However, the think tank said that even in a “best case” scenario, there would be a “sharp slowdown” in world growth for the first half of this year as supply chains and commodities are hit, tourism falters, and confidence collapses.
The Guardian says the OECD has also called for greater support for healthcare systems and workers, and for nations to protect the incomes of their most vulnerable social groups and businesses.
Closer to home, the Bank of England said yesterday that it was continuing to monitor coronavirus developments and assessing its potential impact on the global and UK economies and financial systems.
“The Bank is working closely with HM Treasury and the FCA (Financial Conduct Authority) - as well as our international partners - to ensure all necessary steps are taken to protect financial and monetary stability,” a spokesman said.
Last week, outgoing Bank of England governor Mark Carney told Sky News that Britain should prepare itself for an economic growth downgrade as the impact of the outbreak deepens.
Two of Europe’s most senior central bankers have told the Financial Times they were closely monitoring the economic impact of the coronavirus and stood ready to act if needed.
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