World growth to take hit from virus: OECD

World economic growth is projected to take a hit of about 0.5 percentage points due to the novel coronavirus, the Organisation for Economic Cooperation and Development (OECD) says.

The Paris-based intergovernmental think tank revised its forecast for world growth in 2020 down from about 3 per cent to around 2.4 per cent.

Projected growth could even be halved to 1.5 per cent worldwide, pushing Japan and the eurozone into recession, if current assumptions about the spread of the virus are too optimistic.

The 2.4-per-cent-growth projection is based on the epidemic peaking in China in the first quarter of this year, and only sporadic and contained outbreaks taking place in other countries.

"A longer lasting and more intensive coronavirus outbreak, spreading widely throughout the Asia-Pacific region, Europe and North America, would weaken prospects considerably," the organisation warned.

The economic impact of the novel coronavirus has been quick and widespread because of China's key role in global supply chains, travel and commodity markets, the report noted.

The OECD predicts China's economic growth will slip below 5 per cent of gross domestic product this year, compared to 6.1 per cent in 2019.

It should recover to more than 6 per cent in 2021.

If the virus peaks as predicted, the world economy could also recover in 2021, with the aid of economic stimulus policies in the most badly affected countries.

In that case, world growth could reach 3.25 per cent in 2021, up from November's projection of 3 per cent as it regains ground lost due to the impact of the virus.

Austrlaian Associated PressBack to Breaking News

  • Print this page
  • Copy Link