Business Today Malaysia|April / May 2020
As the outbreak of the novel coronavirus Covid-19 threatens a global pandemic, major stock markets around the world have suffered their worst performance since the 2008 financial crush.
The OECD has warned that the coronavirus outbreak could halve global economic growth this year to 1.5 percent, the slowest rate since 2009. It has cut its 2020 growth forecast for China to a 30-year low of 4.9 percent, down from 5.7 percent in November.
The IMF downgraded its growth forecast for China to 5.6 percent in 2020, its lowest since 1990. Economists, polled by Reuters during 7-13 February, expected China’s economic growth to slump to 4.5 percent in the first quarter of 2020, down from 6 percent in the previous quarter, the slowest since the financial crisis.
Meanwhile, China’s manufacturing sector tumbled in February, as many factories remained closed after the annual lunar new year break. The Manufacturing Purchasing Managers Index (PMI), a widely used measure of factory activity, plunged to a record low in February, reflecting the sharp contraction.
The World Trade Organization (WTO) head expects the coronavirus epidemic to greatly slow the global economy, as China accounts for 19.1 percent of global GDP using purchasing power parity (PPP), or 17 percent at current exchange rates, 13 percent of global trade, and 28 percent of global manufacturing output in 2018.
IMPACT ON DEVELOPING ECONOMIES
Developing countries, especially those dependent on commodity exports and global supply chains, are particularly vulnerable.
You can read up to 3 premium stories before you subscribe to Magzter GOLD
Log in, if you are already a subscriber
Get unlimited access to thousands of curated premium stories and 5,000+ magazines
READ THE ENTIRE ISSUE
April / May 2020