FOLLOW US

America March 2, 2020 3 mins read

World economy may shrink because of virus, watchdog says

America ı By Catherine Davis

0 Comments

COVID-19

A global agency says the spreading new virus could make the world economy shrink this quarter for the first time since the international financial crisis more than a decade ago.

In a special report on the impact of the virus, the Organization for Economic Cooperation and Development said Monday that the world economy is still expected to grow overall this year and rebound next year.

But the OECD lowered its forecasts for global growth in 2020 by half a percentage point, to 2.4% — and said the figure could go as low as 1.5% if the virus lasts long and spreads widely.

In addition to the “considerable human suffering” the virus has wrought, with more than 3,000 deaths worldwide, the OECD said ”“Global economic prospects remain subdued and very uncertain.”

The last time the world economy shrank on a quarter-on-quarter basis was at the end of 2008, when a shock to the financial sector caused turmoil for businesses around the world and mass layoffs. On a full-year basis, it last shrank in 2009.

The OECD said China’s reduced production is hitting Asia particularly hard but also companies around the world that depend on its goods.

It urged governments to act fast to prevent contagion and restore consumer confidence.

The Paris-based OECD, which advises developed economies on policy, said the impact of this virus is much higher than past outbreaks because “the global economy has become substantially more interconnected, and China plays a far greater role in global output, trade, tourism and commodity markets.”

China’s viral outbreak has already disrupted global supply chains and cut business profits. And as the disease spreads, economists now worry about a graver scenario: That quarantines and greater caution among consumers will lead people to cancel travel plans, skip restaurant meals, avoid stores or stay home from work.

Already the European Union’s markets commissioner, Thierry Breton, estimated Monday that the virus has cost Europe 2 billion euros ($2.2 billion) this year in tourism revenue alone, mainly because of the drop in number of Chinese tourists. Things are expected to get worse for Europe with the eruption of cases in northern Italy and the cancellation of events like the Venice Carnival.

Investors seem to expect central banks to come to the rescue by cutting interest rates, particularly in the U.S. But experts not that lower rates cannot fix the problem.

Lower rates can lead people and businesses to borrow and spend, which can boost economic activity. But they can’t make sick people healthy, reopen factories whose workers are kept home because of quarantines or restart supply chains in areas of the world struck by the outbreak.

Previous Article

Pete Buttigieg Ends Presidential Campaign

Read More
225 Posts

Catherine Davis

Catherine Davis is a contributor to the USA Herald. She covers politics and reports on issues of the times.

Discussion

No comments yet. Be the first to join the discussion!

Don’t Miss It
America October 15, 2026 Trump Scraps Hegseth’s Execution Livestream After Backlash By – Michallie Harrison
America October 15, 2026 Trump Weighs ‘Mother of All Bombs’ for Iran, CNN Reports By – Michallie Harrison
America October 15, 2026 Killed by Police Officer? Sandra Birchmore Case By – Jackie Allen
America October 15, 2026 Katie Zacharia’s Lawyer Claims Trigger Bar Complaint By – Michallie Harrison
America October 14, 2026
Millions of Drivers May Have Fed…

What Drivers Need to Know More than 15 million motorists…

By – Samuel Lopez
America October 14, 2026
OpenAI Says Ex-Employee Took 100+ Secret…

What the Court Fight Just Revealed OpenAI says a former…

By – Samuel Lopez
America October 14, 2026
U.S. Sends Hundreds of Troops Into…

Key Takeaways The United States is reportedly sending roughly 600…

By – Samuel Lopez
America October 14, 2026
ICON $200M Series D Puts 3D-Printed…

Most homes take months of hammers, crews and weather delays.…

By – Tyler Brooks
America October 14, 2026
7-Eleven $2.3M Settlement Ends Tobacco Surcharge…

Quitting a habit is supposed to be rewarded. For some…

By – Tyler Brooks
America October 14, 2026
Netflix Cuts 1,000 Jobs Raising Questions…

What Netflix Workers and Investors Need to Know Netflix is…

By – Samuel Lopez
America October 14, 2026
Zocdoc Acquires Sohar Health in First…

Some companies spend two decades building before they ever buy…

By – Tyler Brooks
America October 14, 2026
US Cuts Obamacare Subsidies for 189,000…

Audits rarely make headlines until the numbers get big enough…

By – Tyler Brooks
America October 14, 2026
Drake Bell SAG-AFTRA Insurance Eligibility Dispute…

Thirty-five years in the business can still leave an actor…

By – Tyler Brooks
America October 14, 2026
Bus Stop Fight: Georgia Prosecutor Declines…

A Bus Stop Fight involving two middle school students in…

By – Jackie Allen
America October 14, 2026
Federal Agents Search Rep. Ilhan Omar’s…

WASHINGTON, D.C. — Federal agents searched the Washington-area home of…

By – Derek Johnson
America October 13, 2026
Trump Ally Pitches Ballot Seizures, Talks…

WASHINGTON — Attorney Peter Ticktin, an ally of President Donald…

By – Michallie Harrison
America October 13, 2026
Bank of America Fined $1.2B After…

WASHINGTON — Federal regulators imposed more than $1.2 billion in…

By – Michallie Harrison
America October 13, 2026
Archbishop to Catholic Troops: Seek Firing…

WASHINGTON — Archbishop Timothy Broglio is directing Catholic troops assigned…

By – Michallie Harrison
America October 13, 2026
Trump’s Fight to Shield DOGE Records…

WASHINGTON — The Supreme Court agreed Tuesday to hear the…

By – Michallie Harrison
America October 13, 2026
SETI Scientists Hunt For Alien Technology…

What Scientists Are Watching Researchers are proposing a forensic search…

By – Samuel Lopez
America October 13, 2026
Standing Rock Reopens Dakota Access Pipeline…

What’s at Stake Beneath Lake Oahe Standing Rock is asking…

By – Samuel Lopez
America October 13, 2026
Trump Forces Kimberly Guilfoyle to Resign…

Kimberly Guilfoyle, the U.S. ambassador to Greece and a longtime…

By – Jackie Allen
Business October 14, 2026
Six Senators, Including Four Republicans, Demand…

WASHINGTON, D.C. — A bipartisan group of six U.S. senators,…

By – Derek Johnson
America October 13, 2026
Ilhan Omar Faces Federal Search as…

Ilhan Omar, is a current Minnesota Democratic congresswoman known for…

By – Jackie Allen
America October 13, 2026
David Grusch Takes Pentagon FOIA Fight…

Key Takeaways Former U.S. intelligence officerDavid Grusch is fighting the…

By – Samuel Lopez
America October 12, 2026
Corcept Moves to Bar Retired Federal…

What’s at Stake in the Korlym Fight Corcept Therapeutics wants…

By – Samuel Lopez
America October 12, 2026
Selma Blair Faces Issues After Alleged…

Selma Blair, the actress known for her roles in Cruel…

By – Jackie Allen
America October 12, 2026
Medicare Insurer Sues CMS After Star…

What’s at Stake Alignment’s largest California Medicare Advantage contract fell…

By – Samuel Lopez
America October 9, 2026
Mother of Dead Russian Plague Lab…

What Readers Need to Know Darya Shipilova’s mother says the…

By – Samuel Lopez
America October 9, 2026
Cornell Rape Case Raises a Difficult…

SIDEBAR Major research generally places demonstrably false sexual-assault reports at…

By – Samuel Lopez
America October 9, 2026
Kevin Hart’s 2017 Sex Tape Could…

SIDEBAR Kevin Hart’s former assistant Miesha Shakes has identified both…

By – Samuel Lopez
America October 8, 2026
Hegseth’s Execution Livestream Is a Disgrace

The Pentagon plans to livestream the firing-squad execution of Nidal…

By – Michallie Harrison
America October 8, 2026
Christa Pike Survived. Can Tennessee Execute…

NASHVILLE, Tenn. — Christa Pike is conscious and speaking after…

By – Michallie Harrison
America October 8, 2026
Judge Newman Wins Independent Review As…

What Changed for Judge Newman Judge Pauline Newman has finally…

By – Samuel Lopez
America October 11, 2026
AP Poll Top 25: Georgia Claims…

Georgia has reclaimed the top spot in the AP Poll…

By – Rachel Moore
America October 10, 2026
A.J. Armstrong: Former NFL Player’s Son…

 HOUSTON — Antonio “A.J.” Armstrong Jr., the son of former…

By – Jackie Allen
America October 9, 2026
NFL Pro Tyreek Hill Takes the…

What the Jury Is Hearing Lakeeta “Keeta” Vaccaro Hill testified…

By – Samuel Lopez
America October 9, 2026
Terrell Owens Sued By Nolan Wells’…

What Readers Need to Know Three young men who were…

By – Samuel Lopez
America October 3, 2026
California Sends Cease and Desist Letter…

What Matters in This Fight California regulators have reportedly ordered…

By – Samuel Lopez
America October 3, 2026
Costco Faces $5 Million Sugar-Free Lawsuit…

By Samuel López | USA Herald Costco Wholesale Corporation is…

By – Samuel Lopez

No posts found.

No posts found.

Signup for the USA Herald
exclusive Newsletter