The coronavirus outbreak could cost the global economy as much as $2 trillion, according to the United Nations Conference for Trade and Development (UNCTAD).
The forecast was made as part of a ‘Doomesday scenario’ in which the world economy only grows by 0.5% due the outbreak and the collapse in oil prices.
However, UNCTAD pointed out that the cost to the global economy will most likely be $1 trillion due to uncertainty and the break down of supply chains.
“We envisage a slowdown in the global economy to under 2% for this year, and that will probably cost in the order of $1 trillion, compared with what people were forecasting back in September,” said Richard Kozul-Wright, Director, Division on Globalisation and Development Strategies, UNCTAD.
Coronavirus has caused congestion and delay at many of the world’s biggest ports, which has in turn had a detrimental effect on the movement of goods.
The ports of Los Angeles and Long Beach have been affected particularly badly, as major hubs of trade in China, such as Shanghai.
For more information on how the coronavirus has affected some of the biggest ports in the world, read this exclusive Port Technology Insight (PTI).
The World Health Organisation (WHO) officially updated the outbreak to a pandemic, a disease that is spreading in several countries at the same time.
Kozul-Wright urged governments to spend more in order to prevent the feared economic meltdown, adding that China is likely to increase its containment efforts.