OECD reduces global economic projections for 2020

The global impact of the coronavirus and declines in Chinese production have influenced the reduction of the economic growth forecast made by the OECD (Organization for Economic Cooperation and Development) for 2020. The new expansion forecast of 2.4% is the lowest since 2009.

“The global economic outlook remains subdued and highly uncertain due to the coronavirus outbreak,” the OECD emphasized in its report, also citing the risk of a slowdown in the global economy in the first quarter.

“The main message from this downturn scenario is that it will push many countries into recession, which is why we call for urgent action to be taken in the affected areas as soon as possible,” OECD chief economist Laurence Boone told Reuters.

The new projections made by the OECD for China are for a growth rate of 4.9%, representing a reduction of 0.8 percentage points compared to the previous estimate of 5.7%.

The organization estimates that the Chinese economy will recover in 2021 from the effects of the coronavirus, with an estimated 6.4%.

For the United States, the growth projection for 2020 was reduced from 2% to 1.9%, reaching 2.1% in 2021. In the eurozone countries, the expansion estimate fell to 0.8% from 1.1% previously. For 2021, growth is expected to rise to 2.1%.

For Brazil, the OECD growth projection was maintained at 1.7% in 2020 and 1.8% in 2021.

According to the OECD, the estimate of a 0.5 reduction in global growth is considering a scenario where the highest peak in cases of the coronavirus epidemic is in China and not so high in other countries.

Otherwise, with longer and more intensive outbreaks of the epidemic on other continents, it could lead to the global growth rate reaching a level of just 1.5% in 2020.

On the other hand, the institution projects that the global economy may recover, with a possible growth of 3.3% in 2021, if the epidemic remains greater in this first quarter in China and is contained in other countries.