Coronavirus wipes more than £200bn off the global economy: World set for weakest growth since financial crisis, experts warn
The global economy faces its worst quarter since the financial crisis as the coronavirus wipes more than £200billion off output worldwide, experts warned.
Analysts at Swiss bank UBS think global growth may stutter to a near-standstill in the first quarter of 2020, as consumers and workers around Asia stay at home and factories and shops are closed.
Consultants at Capital Economics were even more pessimistic, predicting that global economic output would not increase at all in the first quarter of this year for the first time since 2009.
Analysts think global growth may stutter to a near-standstill in the first quarter of 2020, as consumers and workers around Asia stay at home and factories and shops are closed
The research consultancy said: ‘Our best guess is that the economic disruption related to the coronavirus will cost the world economy over $280billion [£217billion] in the first quarter of this year.
‘If we’re right, then this will mean that global GDP will not grow in quarter-on-quarter terms for the first time since 2009.’
Originating in Wuhan, China, there have been more than 40,000 confirmed cases of novel coronavirus and more than 900 deaths, mostly in China. Eight cases have been confirmed in the UK.
Although workers were officially required to be back at their posts in China this week, many employers have continued to encourage staff to work from home, and some factories have remained closed as workers refuse to show up.
Tech conference hit by fears
A global gathering of the mobile industry is being abandoned by firms over concerns about the deadly coronavirus.
Sony and NTT Docomo became the latest to pull out of Mobile World Congress (MWC) in Barcelona after Amazon, LG Electronics, Ericsson and Nvidia said they were withdrawing.
Meanwhile, Chinese telecoms giant Huawei is only sending a select number of staff from its home country – where the outbreak originated – while domestic rival ZTE has cancelled its press conference. Sony said its decision was linked to the ‘safety and wellbeing of our customers, partners, media and employees’.
MWC organisers said microphones will be routinely disinfected, attendees encouraged not to shake hands and visitors from China put in a 14-day isolation before the event starts.
And with industrial activity in the world’s largest economy paralysed, the ripples are spreading.
Car maker Nissan halted production at its plant in Kyushu, Japan, yesterday after struggling to get parts from China.
Starbucks, Apple and McDonald’s have shut down outlets in China, and last week Burberry warned that coronavirus was having a ‘material negative effect on luxury demand’.
Shared office provider Wework has closed 100 locations in China and British Airways, which suspended flights to China at the end of January, said yesterday that routes to Shanghai and Beijing would remain grounded until March 31.
Although UBS is forecasting a hefty hit to economic growth in the first quarter of 2020, the bank suggests this will be short and sharp.
But it also expects global growth to bounce back by 4.19 per cent in the third quarter of this year – higher than the 3.07 per cent it had initially forecast – as health authorities around the world get to grips with the virus and businesses try to make up for lost time.
Stock markets around the world have already taken a beating from worries over the coronavirus outbreak, and many were down again yesterday.