Reassessing the Global Economic Fallout From COVID-19

Mar 24, 2020 | 10:00 GMT

A colorful and conceptual 3D illustration of the novel coronavirus.

A 3D illustration of COVID-19. The global economy is now expected to experience significantly lower growth in 2020 as more consumers and businesses adjust to a quarantined world.



  • As the coronavirus continues to spread outside China, earlier forecasts for global economic growth of 2.5-3.3 percent in 2020 are now high ceilings in the best-case scenarios that assume a quick economic recovery. 
  • Hard data coming out of China now suggest that what started as a massive global supply shock has since begun morphing into a demand shock, due to both mandated and individually self-imposed quarantines of large populations around the globe.
  • The seasonality of the virus and the speed of recovery in affected countries will prove critical in assessing the global impact in the coming months, as well as how quickly and efficiently governments respond to stem both the health and economic impacts.

As the COVID-19 outbreak continues to spread to more countries in more corners of the world, initial forecasts that the total economic damage would be mostly contained to China are no longer plausible. Consensus estimates now suggest a 5-10 percent drop in global gross domestic product (GDP) in the quarter in which country-wide epidemics begin, persisting at an as-yet-undetermined magnitude into the next quarter as consumers and businesses adjust to the impact. The still many unknowns that surround the pandemic, however, has made it difficult to forecast the full economic fallout. China’s recovery may thus provide a better benchmark for what will happen elsewhere, given its status as the initial epicenter. But few other countries will be willing or able to take actions as draconian as Beijing's to quickly and efficiently contain the virus -- and the subsequent economic hits. ...

Keep Reading

Register to read three free articles

Proceed to sign up

Register Now

Already have an account?

Sign In