By Tom Burnett CFA
On March 2, 2020, the OECD (Organization of Economic Cooperation and Development) in Paris issued a special “Interim Economic Outlook” notice warning that the Coronavirus outbreak is putting the global economy at risk. In this Notice, the OECD revised its growth forecasts down sharply.
The World GDP estimate for 2020 was lowered from 2.7% to 2.4%. The World growth rate is expected to recover to 3.3% in 2021, after the impact of the virus outbreak has waned. World growth in 2019 came in at 2.9%. The main culprit of the weakness is China whose GDP growth in 2020 is expected to decline from 6.1% last year to 4.9% in 2020.
In the U.S., GDP growth is forecast at 1.9% in 2020, down from 2.3% in 2019 with an expected increase to 2.1% in 2021. Finally, the EU GDP growth rate for 2020 is projected at 0.8%, down 0.3% from earlier projections and down from the 1.2% rate in 2019.
In its March 2 Notice, the OECD reminded readers that further reductions in GDP growth were possible if the virus outbreak is not contained effectively over the next several weeks.
Tom Burnett is the Director of Research