Global economy will suffer significantly if the coronavirus outbreak continues unabated, shows a study. According to an analysis by Oxford Economics, global economy would lose $1.1 trillion, or its 1.3 per cent, if the deadly virus outbreak blows up into a global pandemic. Even if coronavirus remains contained within Asia, it will wipe out $400 billion from the global GDP.
In its latest Global Outlook for February-March 2020, Oxford Economics said that the rapid spread of coronavirus will weaken China's GDP growth sharply in the short-term, causing disruption for the rest of the world. "We now expect global GDP growth to slow to just 1.9 per cent year-on-year in Q1 this year and have lowered our forecast for 2020 as a whole from 2.5 per cent to 2.3 per cent, down from 2.6 per cent in 2019," the report said.
The outbreak could reverse the recovery for world trade and the manufacturing sector, it further added. Before the crisis, it seemed as if the worst was over, but recent developments have dashed tentative optimism, the Oxford Economics outlook said.
The outlook said that while the near-term impact of coronavirus is uncertain, the disruption to China will be apparent in Q1, with Chinese GDP growth rate nose-diving to just 3.8 percent. Although there are chances of recovery in the following two quarters Q2 and Q3, the loss in activity will need time to recover completely. For 2020, the report predicts China's GDP growth to remain at 5.4 per cent.
"Weaker Chinese imports and tourism as well as significant disruption to global supply chains will take a toll on the rest of the world, particularly in the AsiaPacific region. And the shock will exacerbate the ongoing slowdown in the United States and may result in the eurozone barely expanding for a second quarter running in Q1," the report stated.
Officially dubbed COVID-19, the coronavirus has been declared a "public health emergency of international concern" by the WHO. However, it has not been termed a pandemic yet. So far, it has claimed 2,666 lives in mainland China alone, with almost 78,000 confirmed cases of infection.