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 lowered its central growth forecast for this year from 2.9 per cent to 2.4 per cent but predicted a ‘longerlasting and more intensive coronavirus outbreak’ could slash this to 1. per cent.

Laurence Boone, the OECD’s chief economist, said: ‘The main message from this downside scenario 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 can help boost confidence with the recovery of demand once the outbreak eases and travel restrictions are removed’.

With savers reeling from the worst week on stock markets since the financial crisis, the Bank of England said it was ‘working closely with HM Treasury and the Financial Conduct Authority – as well as our international partners – to ensure all necessary steps are taken to protect financial and monetary stability’.

Analysts predicted the Bank could swiftly 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 issued a joint statement saying they ‘stand ready to help our member countries address the human tragedy and economic challenge’ of the crisis.