You are here: Home » International » News » Economy
Business Standard

Coronavirus may shrink world economy, cause repeat of 2008 crisis: Report

The OECD said China's reduced production is hitting Asia particularly hard but also companies around the world that depend on its goods

AP | PTI  |  Paris 

coronavirus, gold stocks
OECD lowered its forecasts for global growth in 2020 by half a percentage point, to 2.4% | File Photo

A global agency says the spreading new virus could make the shrink this quarter, for the first time since the financial crisis more than a decade ago.

The Organization for Economic Cooperation and Development says Monday in a special report on the impact of the virus that the is still expected to grow overall this year and rebound next year.

But it lowered its forecasts for global growth in 2020 by half a percentage point, to 2.4 per cent, and said the figure could go as low as 1.5 per cent if the virus lasts long and spreads widely.

The last time world GDP shrank on a quarter-on-quarter basis was at the end of 2008, during the depths of the financial crisis. On a full-year basis, it last shrank in 2009.

The said China's reduced production is hitting Asia particularly hard but also companies around the world that depend on its goods.

It urged governments to act fast to prevent contagion and restore consumer confidence.

The Paris-based OECD, which advises developed economies on policy, said the impact of this virus is much higher than past outbreaks because "the global has become substantially more interconnected, and China plays a far greater role in global output, trade, tourism and commodity markets.

First Published: Mon, March 02 2020. 16:18 IST
RECOMMENDED FOR YOU