WB Predicts Lower Growth Forecast for This Year Reflecting New Coronavirus Impact

[Asia Economy Beijing=Special Correspondent Park Sun-mi] The World Bank (WB) plans to downgrade its global economic growth forecast in response to the spread of the novel coronavirus.

According to the Hong Kong South China Morning Post (SCMP) on the 5th, David Malpass, President of the WB, stated on the 4th (local time) that the novel coronavirus has caused hundreds of deaths in China and led to the closing of borders, posing a threat to the global economic outlook.

He predicted, "The global economic growth forecast for this year may be lowered," explaining that the background for the downgrade is the suspension of flights between China by airlines worldwide and restrictions on cross-border movement, which could disrupt global supply chains.

The WB is the first international organization to signal a downgrade in the global economic growth rate due to the novel coronavirus.

President Malpass added, "It is to the extent that supply chains need to be adjusted to produce goods." Last month, the WB announced that the global economy, which recorded a 2.4% growth rate last year, was expected to grow by 2.5% this year due to the easing atmosphere of the US-China trade war.

Janet Yellen, former Chair of the US Federal Reserve (Fed), also diagnosed that the spread of the novel coronavirus would severely impact China's growth rate in the first and second quarters, saying, "The novel coronavirus will clearly potentially affect the global economy." She added, "There remains tremendous uncertainty about what will happen regarding the novel coronavirus and whether it can be contained," calling it "a huge concern."

However, she noted that recently economists have been observing what happened during past epidemics such as the 2003 Severe Acute Respiratory Syndrome (SARS), and generally, the impact is short-term, saying, "While the spread could pose risks to the global economy, the long-term damage may not be significant."

This content was produced with the assistance of AI translation services.