London Daily

Focus on the big picture.
Friday, Jun 20, 2025

Coronavirus: Global growth ‘could halve’ if outbreak intensifies

The global economy could grow at its slowest rate since 2009 this year due to the coronavirus outbreak, the Organisation for Economic Cooperation and Development (OECD) has warned.
The influential think tank has forecast growth of just 2.4% in 2020, down from 2.9% in November.

But it said a longer "more intensive" outbreak could halve growth to 1.5%.

It came after the Bank of England vowed to help stabilise markets, which suffered steep losses last week.

Coronavirus is already forcing businesses to suspend operations in China and elsewhere as officials try to contain its spread.

The OECD forecast the global economy could recover to 3.3% growth in 2021, assuming the epidemic peaked in China in the first quarter of this year and other outbreaks proved mild and contained.

But it said the picture would be much worse if the virus spread throughout Asia, Europe and North America.

"The main message from this downside scenario is that it would put many countries into a recession, which is why we are urging measures to be taken in the affected areas as quickly as possible," said Laurence Boone, the OECD's chief economist.

Last week saw major stock markets suffer their worst weekly performance since the 2008 financial crisis, with $1.5 trillion being wiped off the value of global shares. Investors now hope central banks around the world will work in unison to support financial markets as the deadly virus spreads.

On Monday, the Bank of England said it continued to monitor developments and was assessing its potential impact on the global and UK economies and financial systems.

"The Bank is working closely with HM Treasury and the FCA (Financial Conduct Authority) - as well as our international partners - to ensure all necessary steps are taken to protect financial and monetary stability," a spokesman said.

Japan's central bank and the US Federal Reserve have also said they are prepared to intervene to stop more big falls on global stock markets.

Buoyed by the news, US stocks opened higher on Monday, with the Dow Jones Industrial Average and S&P 500 indexes both gaining 0.7%.

London's FTSE 100 index closed 1.2% higher, while China's Shanghai Composite index gained 3.2% and Japan's benchmark index, the Nikkei 225, climbed 1%.

On Monday, the privately-run Caixin/Markit Manufacturing Purchasing Managers' Index showed the fastest rate of contraction in China's factory activity since the survey was launched in 2004. That followed the release on Saturday of equally weak official numbers.

Both sets of data come after employers across the country were ordered to remain closed after the annual Chinese New Year holiday as part of attempts by authorities to stem the spread of the virus.

The falls, which were even worse than the slump seen during the 2008 global financial crisis, highlighted the outbreak's huge impact on the world's second-largest economy.

The OECD said governments would have to step in if the virus worsened, providing extra support for their health systems and emergency loans for hard hit industries.

"A G20 coordinated health, fiscal and monetary policy response would not only send a strong confidence message but also multiply the effect of national actions," Mr Boone added.

Over the weekend senior officials in President Donald Trump's administration also tried to soothe concerns about the impact of the outbreak, highlighting the US economy's underlying strength.

US Vice-President Mike Pence, who is leading the administration's response to the coronavirus, said that the stock market "will come back", adding that "the fundamentals of this economy are strong".
Newsletter

Related Articles

0:00
0:00
Close
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
Plans to Sell Dutch Embassy in Bangkok Face Local Opposition
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump's $5 Million 'Trump Card' Visa Program Draws Nearly 70,000 Applicants
DGCA Finds No Major Safety Concerns in Air India's Boeing 787 Fleet
Airlines Reroute Flights Amid Expanding Middle East Conflict Zones
Elon Musk's xAI Seeks $9.3 Billion in Funding Amid AI Expansion
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Taiwan Imposes Export Ban on Chips to Huawei and SMIC
Israel has just announced plans to strike Tehran again, and in response, Trump has urged people to evacuate
Netanyahu Signals Potential Regime Change in Iran
Juncker Criticizes EU Inaction on Trump Tariffs
EU Proposes Ban on New Russian Gas Contracts
Analysts Warn Iran May Resort to Unconventional Warfare
Iranian Regime Faces Existential Threat Amid Conflict
Energy Infrastructure Becomes War Zone in Middle East
UK Home Secretary Apologizes Over Child Grooming Failures
Trump Organization Launches 5G Mobile Network and Golden Handset
Towcester Hosts 2025 English Greyhound Derby Amid Industry Scrutiny
Gary Oldman and David Beckham Knighted in King's Birthday Honours
Over 30,000 Lightning Strikes Recorded Across UK During Overnight Storms
Princess of Wales Returns to Public Duties at Trooping the Colour
Red Arrows Use Sustainable Fuel in Historic Trooping the Colour Flypast
Former Welsh First Minister Addresses Unionist Concerns Over Irish Language
Iran Signals Openness to Nuclear Negotiations Amid Ongoing Regional Tensions
France Bars Israeli Arms Companies from Paris Defense Expo
King Charles Leads Tribute to Air India Crash Victims at Trooping the Colour
Jack Pitchford Embarks on 200-Mile Walk to Support Stem Cell Charity
Surrey Hikers Take on Challenge of Climbing 11 Peaks in a Single Day
UK Deploys RAF Jets to Middle East Amid Israel-Iran Tensions
Two Skydivers Die in 'Tragic Accident' at Devon Airfield
Sainsbury's and Morrisons Accused of Displaying Prohibited Tobacco Ads
UK Launches National Inquiry into Grooming Gangs
Families Seek Closure After Air India Crash
Gold Emerges as Global Safe Haven Amid Uncertainty
Trump Reports $57 Million Earnings from Crypto Venture
Trump's Military Parade Sparks Concerns Over Authoritarianism
Nationwide 'No Kings' Protests Challenge Trump's Leadership
UK Deploys Jets to Middle East Amid Rising Tensions
Trump's Anti-War Stance Tested Amid Israel-Iran Conflict
Germany Holds First Veterans Celebration Since WWII
U.S. Health Secretary Dismisses CDC Vaccine Advisory Committee
Minnesota Lawmaker Melissa Hortman and Husband Killed in Targeted Attack; Senator John Hoffman and Wife Injured
Exiled Iranian Prince Reza Pahlavi Urges Overthrow of Khamenei Regime
×