The global panic over COVID is straining global economies to the breaking point.
Dutch-headquartered Rabobank now believes “a global recession is now all but certain.” The bank projects global GDP growth will be 1.6% as 2020 ends.
According to the International Monetary Fund, the global economy grew by 2.9 throughout 2019.
It is no stretch of the imagination to say that coronavirus fears are contributing to slowing economic growth.
From February 27 to March 6 more than $9 trillion in value evaporated from global stock markets ledgers. A recent report by Bloomberg Economics projects that the global economy could lose over $2.7 trillion in 2020.
The Dow Jones fell almost 1,500 points, over 20% lower from its most recent levels on March 11 and entered bear-market territory.
This means that history’s longest bull-market expansion, which started in March 2009, has arguably ended.
Billions in aid
The annual G7 summit is a meeting of the leaders of the world’s seven largest economies. These leaders discuss policies, initiatives, and ideas to positively drive global economic growth.
On March 2, French Finance Minister Bruno Le Maire said that G7 leaders would coordinate strategies on how to buffer global commerce from the coronavirus via teleconferencing brainstorming sessions.
The details of these strategies have yet to be revealed.
Meanwhile, the World Bank pledged to provide over $12 billion in funding to help countries whose public health systems and economies have been devastated by the coronavirus.
Eventually, the G7 released this statement:
We resolve to coordinate measures and do whatever it takes, using all policy tools, to achieve strong growth in the G7 economies, and to safeguard against downside risks.
To this end, we are mobilizing the full range of instruments, including monetary and fiscal measures, as well as targeted actions, to support immediately and as much as necessary the workers, companies, and sectors most affected. This is particularly important for small and medium businesses and working families.
We also ask our central banks to continue to coordinate to provide the necessary monetary measures in order to support economic and financial stability, and to promote recovery and growth.
We ask our finance ministers to coordinate on a weekly basis on the implementation of those measures and to develop further timely and effective actions.