World growth may slip to 2.4%; WHO says ‘very high’ risk to virus spreading worldwide
A deepening health crisis became an economic one too Friday as the coronavirus outbreak sapped financial markets, emptied shops and businesses and put major sites and events off limits.
The list of countries hit by the illness edged toward 60 as Mexico, Belarus, Lithuania, New Zealand, Nigeria, Azerbaijan, Iceland and the Netherlands reported their first cases. The threats to livelihoods were increasingly as worrisome as the threats to lives.
“It’s not cholera or the black plague,’’ said Simone Venturini, the city councilor for economic development in Venice, Italy, where tourism already hurt by historic flooding last year has sunk with news of virus cases. “The damage that worries us even more is the damage to the economy.’’ The head of the World Health Organization said Friday that the risk of the virus spreading worldwide was “very high.“ “The continued increase in the number of cases and the number of affected countries over the last few days are clearly of concern,“TedrosAdhanomGhebreyesus told reporters in Geneva.
Economists have forecast global growth will slip to 2.4% this year, the slowest since the Great Recession in 2009, and down from earlier expectations closer to 3%.
For the United States, estimates are falling to as low as 1.7% growth this year, down from 2.3% in 2019.
But if the disease known as COVID-19 becomes a global pandemic, economists expect the impact could be much worse, with the U.S. and other global economies falling into recession.
“If we start to see more cases in the United States, if we start to see people not traveling domestically, if we start to see people stay home from work and from stores, then I think the hit is going to get substantially worse,” said Gus Faucher, an economist at PNC Financial.
As anxiety mounted, so did the economic fallout from the virus. In Asia, attractions including Tokyo Disneyland and Universal Studios Japan announced closures, and events that were expected to attract tens of thousands of people, including a concert series by the Kpop group BTS, were called off.
Investors watched as stocks fell across Asia. On Wall Street, the Dow Jones index suffered another brutal drop, falling 715 points in mid-day trading. The index has dropped more than 13% since last week.
Businesses large and small saw weakness, and people felt it in their wallets. “There’s almost no one coming here,’’ said Kim Yun-ok, who sells doughnuts and seaweed rolls at Seoul’s Gwangjang Market, where crowds were thin Friday as South Korea counted 571 new cases _ more than in China, where the virus emerged. “I am just hoping that the outbreak will come under control soon.” Booking Holdings, which owns the online travel firms Priceline, Booking.com, Kayak and Open-Table, said this week that the coronavirus has had a “significant and negative“effect on its business.
Facebook announced that it would cancel its annual conference for software developers, set for early May in San Jose. The event typically attracts 5,000 attendees.
In Italy, where the count of 650 cases is growing, hotel bookings fell, and Premier Giuseppe Conte raised the specter of recession. Shopkeepers like FlavioGastaldi, who has sold souvenirs in Venice for three decades, wondered if they could survive the blow.
