Three scenarios for coronavirus impact on world economy
BAKU, Azerbaijan, March 16
By Leman Zeynalova – Trend:
The Gas Exporting Countries Forum (GECF) has built up three scenarios on the economic impacts of coronavirus outbreak, Trend reports citing the organization.
“In our baseline scenario, we believe that the coronavirus will be contained by Q3-2020. As such, the world economy will suffer a drastic deceleration to stabilize around 2.7 percent, well below the forecasts in early January 2020, (based on the figures of IMF, OECD and World Bank prior to the occurrence of the coronavirus),” said the organization.
The short-lived scenario, which in GECF’s sense is very optimistic, supposes that the duration of the disruption will be mastered in Q2-2020, through notably strong fiscal and monetary stimulus and a lifting of the imposed quarantine measures under favorable opinions of the medical experts and researchers.
“In the long-lived scenario, which is a warning scenario for the world economy, the economic impact of COVID-19 could be virulent due to a prolonged disruption in the supply chains and a weak demand. In this scenario, the global trade will be contracted and global investment will remain subdued. In addition, global economy would be depressed and it will drive down commodities’ prices with all the consequences they may engender,” said the organization.
“It is important to highlight that under all the above mentioned scenarios, aftershocks responses need to be considered as they could curb the stabilization of the economic growth around the foreseen levels of our today’s estimations.”
GECF believes that no economy in the world will be immune from Coronavirus and the impacts will be heavily felt worldwide if no efficient global measures are found and agreed upon.
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