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Coronavirus outbreak may shrink global economy by over $1 trillion

February 26
15:29 2020

The coronavirus outbreak could wipe $ 1.1 trillion, or 1.3 percent, from the global economy if it turns into a global pandemic, according to an analysis by Oxford Economics.

If the pandemic is restricted to Asia, then the fall in global gross domestic product (GDP) would be 0.5 percent ($ 0.4 trillion), the report said.

Oxford Economics has pegged global economic growth in 2020 to slide to 2.3 percent, the weakest since 2009.

The WHO has declared the outbreak of the novel coronavirus a “public health emergency of international concern,” but has not yet termed it a pandemic. The last official pandemic was the H1N1 flu pandemic in 2009.

The virus, officially called COVID-19, has killed over 2,700 people and infected nearly 80,000 in mainland China alone. Iran, South Korea and Iran have reported the highest number of confirmed cases of the infection outside of China.

The outbreak has caused several factories to pause operations, and affected daily business in major financial centres such as Shanghai, Beijing and Hong Kong. Fears of a pandemic have caused global markets to plunge.

The outbreak will have a significant impact on China’s GDP growth, with Oxford Economics projecting the country’s Q1 growth to drop to 3.8 percent.

“While there were signs in early 2020 that the worst was over for world trade and manufacturing, that optimism has been dashed by the outbreak,” the report stated.

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