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2/19/2020, 3:44 PM (Source: TeleTrader)
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Coronavirus may result in lengthy growth slowdown - IMF

The ongoing coronavirus outbreak in China serves as a reminder of how a "fragile recovery" can at any time be threatened by unforeseen threats, IMF's Managing Director Kristalina Georgieva (pictured) said in a blog post on Wednesday, laying out two different scenarios for the global economic outlook with respect to the duration of the breakout.

A more severe epidemic would lead to a more protracted growth slowdown in China with an "amplified" global impact thanks to "more substantial supply chain disruptions" and a significant drop in investor confidence, the Bulgarian economist noted.

However, should the disruptions from the virus be shortlived, Georgieva noted, the IMF expects the Chinese economy to "bounce back soon." A "sharp drop" in GDP growth would in such a case be limited to the first quarter of the year while spillover to other countries would be "relatively" brief and minor, the financial institution's chief underlined.

Baha Breaking the News (BBN) / GG