the outbreak ofepidemic, together with the recent worsening in global financial conditions and as uncertainty increases, it could depress growth global GDP in the first part of the year, “maybe even below zero in the first quarter”, to slow down altogether 2,4% in 2020 (from +2,9% in 2019), only to then recover to +3,3% in 2021.
The assumption of these projections is that the epidemic affects a peak in China in the first quarter, that there is a gradual recovery in activity in the second quarter aided by significant domestic policy easing, and that new coronavirus cases in other countries are sporadic and contained.
For China, the country hardest hit by the virus, the prognosis is now for growth below 5%. 4,9% against the +5,7% indicated in November, while a rebound to +2021% is expected for 6,4, 0,9 points more than last autumn's estimates.
For Italy the indication is one zero growth this year (up from +0,4%) – the worst figure of the G20 after Argentina (-2%) – while for the 2021 is confirmed + 0,5 %. THE'Eurozone he will have to settle for a 0,8% increase in GDP this year (against +1,1% in November) and 1,2% next year (unchanged). There Germany it will pull the brakes more than expected (+0,3% from +0,4%) and in 2021 it will not go beyond +0,9%, as in the initial estimates. It will also slow down the France, remaining below 1% (+0,9% against +1,2%) this year, while next year it will recover to +1,4% (from +1,2%). The Japanese GDP was cut to +0,2% (from +0,6%) for 2020, while it remains at +0,7% for 2021. The Use they do not escape the adjustment of the forecasts, with +1,9% (from +2%) this year, followed by +2,1% (+0,1 points) the next.
Summing up, the best case scenarioand hypothesized by the OECD it sees an epidemic contained over time and in the affected areas. If it were to materialize, however, the worst case scenario, as the epidemic spreads over time and to more regions, then the implications are of a recession in the Eurozone.
Given the exceptional nature of the event, the Organization also recommends one to the EU greater flexibility on budget constraints for affected countries. Monetary policy must remain supporting, even if after a long period of low or negative interest rates, the impact of further measures on demand and inflation "can only be modest", above all if in the absence of structural and fiscal support policies. In general, i exceptionally low interest rates they provide an opportunity for fiscal policy to strengthen demand in the short term, including the use of spending of a temporary nature in favor of the most affected sectors and social groups.
Interesting