As the new coronavirus infection (Corona19) spreads to various countries, it is paralyzing the global economy, raising concerns about the global economic downturn. According to Bloomberg News on the 13th, China, the United States, Japan, Germany, France, and Italy due to the infliction of Corona 19. These major countries are not doing well, and it is possible to record negative economic growth.

China is already being evaluated for the first time in the first quarter of this year due to the impact of Corona 19, and the United States, according to a study by the Bloomberg Economic Analysis Team, said that the probability of ending the 11-year expansion is 53%.

COVID-19 uncertainty: A virus-weakened global economy

The United States and the European Union (EU) faced the “clear potential” of the recession due to the Coronavirus spreading not just the infection but fear among many investors. The financial market could face the possibility of stagnation. 

Larry Summers, a former US Treasury Secretary, said that Corona 19 could be the most serious crisis of the century, with an 80 percent chance that the United States will be in a recession. The US investment bank BOA lowered its forecast for world economic growth this week to 2.2% from the previous 2.8%.

Wall Street believes the world economy should grow by more than 3.5% in the long run.

“The panic panic continues to spread, which will lead to a global economic downturn,” said Ed Jardeni, chief executive of investment advisory firm Jardeni Research.

JP Morgan said to its clients this week that the risk of a global economic downturn “is materializing,” to regain economic vitality, with the end of Corona 19, more aggressive and creative responses from policymakers, corporate hiring, and financial support from banks is necessary.

Indeed, policymakers around the world are actively responding by providing $ 130 billion in financial and financial support measures related to Corona19 including personal loans (LooseLending personal loans), but it is not enough to revive the contracted demand.

The Federal Reserve (Fed), the central bank of the United States, cut urgency rates on the 3rd, but has not been able to restore market confidence, and is under pressure to cut interest rates again the week before the scheduled monetary policy meeting.

The European Central Bank (ECB) has also released comprehensive support measures to expand liquidity on the market this week, but it has not calmed the market’s anxiety.

Singapore DBS Bank’s Senior Timer Bagim Economist says that although many economic figures have yet to show the serious impact of Corona 19, it can be more serious than the financial crisis. The Corona 19 is shrinking economic activity in many channels, including consumers and businesses.