How the Coronavirus and Tumbling Oil Prices May Affect Global Growth
In the immediate future, a world under coronavirus lockdown won’t benefit from cheaper oil.
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Bloomberg Economics sees global growth slowing to 1.5% in the first quarter from a year ago, before a partial recovery in the second and an acceleration at year-end. That trajectory, which puts 2020 global growth at 2.6%, down from a forecast of 3.3% before the coronavirus hit, is subject to marked downside risks: A full-blown pandemic results in almost zero growth. In the immediate future, a world under coronavirus lockdown won’t benefit from cheaper oil. Instead, Brent’s decline from almost $60 a barrel in late February to $37 in early March threatens to compound the blow to the economy. When the virus panic passes, though, low prices should buoy the recovery.
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