Outbreak ‘may halve global growth’

THE coronavirus outbreak could slash global economic growth in half and plunge many countries into recession, an influential watchdog warned yesterday.

The Organisation for Economic Co-operation and Development (OECD) lowered its forecast for this year from 2.9 per cent to 2.4 per cent but predicted a ‘longer-lasting and more intensive coronavirus outbreak’ could slash this to 1. per cent.

Laurence Boone, the OECD’s chief economist, said: ‘The main message... 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.’ The watchdog said lower interest rates and stronger government spending could help boost confidence.

With savers reeling from the worst week on stock markets since the financial crisis, the Bank of England said it taking steps to ‘protect financial and monetary stability’.

Analysts predicted the Bank could cut interest rates from the current 0.7 per cent in a bid to boost the economy. The International Monetary Fund and the World Bank Group said they were ready to help address the ‘economic challenge’.

Wall Street last night bounced back from the coronavirus-fuelled sell-off that sent markets tumbling last week.

The Dow Jones gained .1 per cent – its biggest percentage increase since 2009. The tech-focused Nasdaq index had its best day since 2018. Analysts said the recovery was partly due to traders using the plunge as a buying opportunity.