Global economic growth is likely to be the worst. Since the Great Recession of the coronavirus outbreak and other factors that influence it, economic growth has affected.
2.8% for 2020 of Gross Domestic Product (GDP) worldwide turns to be slow down. BofA (Bank of America) Global Research said that the recession and financial crises went to sub-3% reading in mid-2009.
As the coronavirus outbreak, it also slows down the economic activities in China as the disease spreads. According to CNBC, BofA economists say that the U.S-China trade war, political uncertainty, and weakness in Japan and some regions of South America are also part of the “large spillover effects” weighing on output.
The coronavirus outbreak doesn’t only affect all humankind living, but also to the economic aspects worldwide. Since the recession, global GDP not including China is expected to rise just 2.2% as the lowest point of economic growth.
Bhave said such “uncertainty shocks” tend to have ‘lagged, large, and long-lasting” impacts. Tighter central bank policy and lingering aftereffects from tepid growth in 2019 are also weighing on growth. Bhave added, “business investment is likely to remain tepid until there is greater clarity on the rules of a game.”
“Other impacts are about the upcoming presidential elections. It adds another layer of complexity. US trade policy would probably change significantly under a Democratic President.” added Bhave.
“Last quarter’s soft patch creates unfavorable base effects for annual growth,” Bhave said. “This is about GDP math. Perhaps more importantly, the weakness in the global economy left a little bit buffer against a major shock. Unfortunately, the COVID-19 outbreak is turning out to be that shock”.