Coronavirus Exposes Global Economic Vulnerability

By Anis Chowdhury and Jomo Kwame SundaramSYDNEY and KUALA LUMPUR, Mar 4 2020 (IPS) As the outbreak of the novel coronavirus COVID-19 threatens a global pandemic, major stock markets around the world have suffered their worst performance since the 2008 financial crush. Growth disruption The OECD has warned that the coronavirus outbreak could halve global economic growth this year to 1.5%, the slowest rate since 2009. It has cut its 2020 growth forecast for China to a 30-year low of 4.9%, down from 5.7% in November. Anis ChowdhuryThe IMF downgraded its growth forecast for China to 5.6% in 2020, its lowest since 1990. Economists, polled by Reuters during 7-13 February, expected China’s economic growth to slump to 4.5% in the first quarter of 2020, down from 6% in the previous quarter, the slowest since the financial crisis. Meanwhile, China’s manufacturing sector tumbled in February, as many factories remained closed after the annual lunar new year break. The Manufacturing Purchasing Managers Index (PMI), a widely used measure of factory activity, plunged to a record low in February, reflecting the sharp contraction. The World Trade Organization (WTO) head expects the coronavirus epidemic to greatly slow the global economy, as China accounts for 19.1% of global GDP using purchasing power parity (PPP), or 17% at current exchange rates, 13% of global trade, and 28% of global manufacturing output in 2018. Impact on developing economies Developing countries, especially those d...
Source: IPS Inter Press Service - Health - Category: International Medicine & Public Health Authors: Tags: Development & Aid Economy & Trade Featured Financial Crisis Global Headlines Health Humanitarian Emergencies TerraViva United Nations Jomo Kwame Sundaram & Anis Chowdhury Source Type: news