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Economists at Standard Chartered Bank have had to downgrade their global growth forecast after the outbreak of the coronavirus in China. 

Key quotes

“We have downgraded our forecast for China’s 2020 growth to 5.8% from 6.1%. We now also lower our global GDP growth forecast to 3.2% from 3.3%.”

“Taiwan, Singapore, Thailand and Hong Kong show the highest beta to China’s growth and may experience the largest knock-on effect from China’s expected near-term downturn.”

“Our global GDP growth projection faces further downside risks as we review our forecasts for a number of economies. A downward revision of just 0.1ppt in the US and euro-area growth would lower our global growth projection to 3.152% from 3.181% currently. A larger downward revision would easily lower our projection to 3.1%.” 

“Another new shock in the coming months would increase the chances of a global recession (which we define as global growth falling below 2.5%).”