Covid-19 can hit global growth, may erase $1 trillion from world GDP
1 min read 26 Feb 2020, 12:07 PM ISTWeaker Chinese imports and significant disruption to global supply chains will take a toll on the rest of the world, particularly Asia Pacific region
PremiumNEW DELHI: The rapid spread of coronavirus is likely to drag global GDP growth to 2.3% in 2020, Oxford Economics said in its latest report.
"We now expect global GDP growth to slow to just 1.9% year-on-year in Q1 this year and have lowered our forecast for 2020 as a whole from 2.5% to 2.3%, down from 2.6% in 2019," the report said.
Analysts at Oxford Economics also said the health crisis could be enough to wipe out over $1 trillion from global gross domestic product.
Weaker Chinese imports and significant disruption to global supply chains will take a toll on the rest of the world economies, particularly the Asia Pacific region, said Oxford Economics, a global forecasting and quantitative analysis firm.
In China, the epicentre of the outbreak, growth is expected to plunge to just 3.8% year-on-year during January-March.
The shock will exacerbate the slowdown in the US, while the eurozone may barely expand for a second quarter.
As the disruption from the virus outbreak fades and firms make up for the output lost earlier in the year, quarterly global GDP growth is likely to strengthen a little in the second half of this year, the report said.
The analysis firm also lowered its Brent crude oil price forecast to $62.4 per barrel in 2020 from about $65 earlier forecast owing to weaker demand in the short term.
"We have cut our projection for growth in crude demand in 2020 by 0.2 million barrels per day to 0.9 mb/d," it said.
Global markets have been battered in the recent past as authorities have failed to contain the spread of the virus, which first emerged in December, beyond China, with more and more countries reporting an escalation in confirmed cases and deaths.
The death toll in China's novel coronavirus epidemic climbed to 2,715 with 52 new fatalities reported. The number of confirmed cases rose to 78,064.
