OECD warns coronavirus could tip European countries into recession

The global economy will experience “a sharp slowdown” because of COVID-19, the OECD said on Monday, driving many affected countries into recession.

Sharp declines in tourism, supply chain disruptions, weak demand and falling consumer confidence have forced economists to revise 2020 growth projections down to only 2.4% — lower than in any year since the financial crisis.

“Regardless of where the virus spreads, the world economy, previously weakened by persistent trade and political tensions, has already suffered a sharp setback,” said Laurence Boone, OECD Chief Economist, adding that the virus had dealt many countries “a nasty blow.”

Economic fears have already influenced stock markets, with the FTSE 100, the French CAC and the German DAX falling sharply last week.

Depending on the outbreak, this shock could send an already weak European economy into recession, economists say.

“If this turns into a full pandemic, then the entire region is likely to fall into recession,” said Ángel Talavera, who is head of Europe economics at Oxford Economics, especially since the euro area is growing at a “very weak pace”.

Read more via Euronews/OECD