International Financial Association Lowers Global Economic Growth Rate to 1.0%... "Lowest Since Financial Crisis"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] The Institute of International Finance (IIF) has lowered its global economic growth forecast for this year to 1.0% due to the impact of the novel coronavirus disease (COVID-19), warning that it could fall to the lowest level since the 2008 global financial crisis.

According to foreign media such as CNBC on the 5th (local time), the IIF announced that it has revised down its global economic growth forecast for this year from the previous 2.6% to 1.0%. Due to the COVID-19 outbreak, the U.S. economic growth forecast was lowered from 2% to 1.3%, and China's economic growth forecast was sharply revised down from 5.9% to 4%, leading to the possibility that this year's economic growth rate could fall to the lowest level since the 2008 financial crisis.

The IIF stated, "Initially, we did not expect a recession this year, but the situation has changed significantly due to fears surrounding COVID-19," adding, "Attention should be paid not only to the U.S. and Chinese economies but also to vulnerabilities in Germany, Japan, and emerging markets."

The IIF emphasized that with the U.S. Federal Reserve's (Fed) interest rate cut moves, central banks in emerging markets have the opportunity to lower rates, and that emerging markets with weakened growth, such as Mexico and South Africa, should hasten to cut rates. The IIF added, "Through monetary easing policies, emerging markets can promote growth and it will help overcome the impact of COVID-19."

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