The OECD has reduced its global growth forecast for 2020 due to the economic impact of the coronavirus outbreak. The organization projects that global GDP growth will be 2.4% this year, down from its previous estimate of 2.9%. The OECD warns that a longer-lasting and more intensive outbreak could further reduce growth.
The Organisation for Economic Co-operation and Development (OECD) has revised its global growth projections downward, citing the significant economic disruption caused by the coronavirus outbreak. The OECD’s latest Interim Economic Assessment forecasts global GDP growth of 2.4% for 2020, a decrease from the 2.9% projected in November.
The report highlights the substantial impact of the virus on China’s economy, with knock-on effects expected to ripple through the global economy. Supply chain disruptions, reduced tourism, and decreased demand for goods and services are all contributing factors.
Key Findings:
- Global growth forecast lowered to 2.4% for 2020.
- China’s growth significantly impacted, with potential for further downward revisions.
- Supply chain disruptions pose a major risk to global manufacturing.
- Tourism and travel sectors heavily affected.
The OECD warns that a more prolonged and intense outbreak could lead to even weaker growth outcomes. They urge governments to take coordinated action to mitigate the economic fallout and support affected sectors.
Potential Risks:
- Escalation of the outbreak to other major economies.
- Prolonged disruption to global supply chains.
- Increased uncertainty leading to decreased investment.
The organization emphasizes the need for international cooperation to contain the virus and minimize its economic consequences. They also recommend that governments consider fiscal and monetary policy measures to support economic activity.