Reassessing the Global Economic Fallout From COVID-19

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. ...