- Economists across Wall Street revised 2020 outlooks downward
- Federal Reserve’s interest rate cut did little to calm markets
- Some experts predict a market contraction on the scale of the decade-old financial crisis
There is little good news coming from most recently revised economic outlooks for 2020 due to the spread of the coronavirus. The Organization for Economic Cooperation and Development (OECD) said that if the coronavirus outbreak “sweeps through the Asia-Pacific region, Europe and North America, global growth could fall to just 1.5% in 2020…”
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The spreading coronavirus is taking its toll around the world. As of March 5, the most current health data from the Worldometers, www.worldometers.org, indicates…
- There are 89 countries and territories involved in the coronavirus.
- Some 98,088 cases worldwide with 94% (54,143) recovered cases and 81% (34,102) mild cases.
- In the United States, there are 200 active cases among a total of 221 cases. (Keep in mind that only 75,000 people had been screened during the first week in March and that is total is expected to be revised upward.)
Laurence Boone, OECD’s chief economist, said, “This is not a worst case scenario…it could be more dire if the outbreak spreads into the Southern Hemisphere, but, even if contained, global growth could go down approximately .5%.”
Boone welcomed the Fed’s surprise -0.5% rate cut last week in response to the coronavirus spread but believes the federal government needs to step in with fiscal measures to relieve economic and business pressures caused by the coronavirus. Some options could include
- Offering incentives for companies to shorten work hours as an alternative to laying off workers
- Delaying tax payments for small businesses suffering from plunging sales
- Dropping tariffs imposed that were part of the China- US trade
- Strengthening global policy cooperation and transparency
Goldman Sachs is predicting the US economy to grow 0.9% during Q1 2020 and to flat-line during Q2 2020. The US Travel Association is predicting international travel to the US to fall by -6% over the next three months. And Roger Dow, president of the US Travel Association, said that domestic business and leisure travel is and will also be effected.
The list of US companies feeling the impact of the coronavirus is growing. Just some of those companies include Best Buy, Microsoft, Apple, Procter & Gamble and Medtronic.
Jim Zarolli of NPR wrote on March 6, “The tumult in the US economy still pales in comparison to damage being felt in other countries. In China, auto sales cratered -80% last month, while a plunge in tourism is expected to push Italy and perhaps France into a recession.”
Thanks to the New York Times’ Jeanna Smialek and Jack Ewing and NPR’s Jim Zarolli for source data.