Global economic growth ‘could stall’ as coronavirus spreads to 64 countries

The Organisation for Economic Cooperation and Development (OECD) says coronavirus outbreak is capable of affecting global economic growth in 2020.

In its interim outlook published on Monday, the Paris-based group said a “longer lasting and more intensive coronavirus outbreak” could slash growth to 1.5 per cent during the year.

It also forecast global growth of 2.4% in 2020, down from the 2.9% it was towards the end of 2019.

Since its outbreak in December, the novel coronavirus has killed more than 3,000 people with 88,000 persons infected, the vast majority in mainland China.

It has also spread rapidly across all the continents except Antarctica, so far hitting about 64 countries as of Monday, with Senegal, Tunisia and Portugal among those with newest cases.

OECD said there is the need for 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,” the group said.

“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.”

Laurence Boone, OECD chief economist, also said the virus risks giving a further blow to a global economy that was “already weakened by trade and political tensions.”

The outbreak had seen major stock markets across the world losing about $1.5 trillion last week, according to the BBC.

Nigeria is also not spared: Analysts believe the country’s economy is at risk of a recession as the outbreak has resulted in a drop in crude oil prices.

TheCable had also reported how Nigeria, with only one case of the coronavirus, might suffer as global crude oil prices continued to contract, dropping $5 lower than the country’s $57 crude oil benchmark in the 2020 budget.