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OECD slashes 2020 global growth forecast over COVID-19

OECD slashes 2020 global growth forecast over COVID-19

The virus has rapidly spread across the world over the past week AFP/STR

PARIS: The coronavirus outbreak will have a major impact on economic growth worldwide this year, the OECD warned Monday (Mar 2) as it lowered its global GDP forecast by half a percentage point to 2.4 per cent, the lowest rate since the 2008-09 financial crisis.

That forecast assumes the virus outbreak fades this year, but a more severe outbreak "would weaken prospects considerably", the group of free-market economies said.

READ: Commentary - COVID-19 outbreak will reshape China’s national priorities

Already the global economy risks an outright contraction in the first quarter, the OECD said, in its first comprehensive study of the impact on the world's major economies.

In China, where the virus dubbed COVID-19 emerged in December, annual GDP growth is expected to reach just 4.9 per cent, a 0.8 point drop from the OECD's original growth forecasts announced last November.

"Output contractions in China are being felt around the world," the 36-member Organization for Economic Cooperation and Development said, as the outbreak continues to batter production, trade, tourism and business travel.

Explore our interactive: All the COVID-19 cases in Singapore and the clusters and links between them

Efforts to contain the virus in China have entailed quarantines and work and travel restrictions that caused delays in restarting factories after the Chinese New Year holiday, as well as sharp cutbacks in service sector activities.

A virtual cessation of outbound tourism from China represented "a sizeable near-term adverse demand shock", the OECD added.

Nearly 90,000 people have been infected in over 60 countries, and more than 3,000 people have been killed as governments scramble to keep the outbreak from spiralling into a pandemic.

BOOKMARK THIS: Our comprehensive coverage of COVID-19 and its developments

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Source: AFP/ad

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