PARIS - The Paris-based Organization for Economic Cooperation and Development (OECD) predicted Monday that the coronavirus will slow global economic growth to its lowest level since the financial crisis. Meanwhile, the European Union is now on high alert.
The OECD expects the world economy to grow only 2.4 percent this year, the lowest level in more than a decade. The organization says that growth could be even lower if the virus spreads further within continents. In Asia, the OECD forecasts China, the world’s second-largest economy and epicenter of the outbreak, will be hardest hit, with just 4.9 percent growth, its lowest in 30 years.
The news is not good in the European Union either. The bloc has announced 2,100 confirmed cases to date in 18 of the 27 member states, and 38 citizen deaths. European Commission President Ursula von der Leyen says Brussels has created a coronavirus response team, and elevated the region’s risk level.
"The ECDC [European Center for Disease Prevention and Control] has announced today that the risk level has risen from moderate to high for people in the European Union. In other words, the virus continues to spread,” she said.
The OECD has downgraded growth expectations for the euro-currency countries to about one percent for both this year and next — what it calls a "sub par" level.
EU Economics Commissioner Paolo Gentiloni says it is too early to measure the economic impact of the virus for the bloc overall. But he says earlier expectations for a quick recovery might be overly optimistic.
"It is time today to declare that the EU is ready to use all the available policy options if and when needed, to safeguard our growth against these downside risks,” he said.
While EU officials promise close coordination among member states, responses so far vary widely. The hardest-hit country, Italy, for example, has adopted a more relaxed approach than in France, which has far fewer cases.
Here in Paris, the world’s most visited city, the Paris fashion week that wraps up Tuesday was marked by absent designers and face masks, as both fashion accessory and precautionary measure. The Louvre museum remained shut for the moment, and the government canceled major events that draw big crowds, like an upcoming book fair.
The European Commission estimates the bloc is losing about one billion dollars monthly in tourism revenue alone. It is urging member states to take measures to reduce the virus’ economic impact on businesses and people.