Int'l ratings agencies warn of global recession due to COVID-19
Updated: 2020-03-27 13:14:12 KST
International ratings agencies are warning the coronavirus shock will shrink the world economy and push countries into recession.
According to the AFP, S&P Global says the eurozone and UK economies will shrink by 2-percent and possibly by up to 10-percent if the COVID-19 crisis rumbles on for a protracted period.
The agency saw Britain and the eurozone are facing recessions.
Moody's forecasts that the world economy will contract by point-5 percent this year, a significant drop from the initial estimate of 2.1-percent growth.
It adds the economies of the U.S., Eurozone, the U.K. and Japan will shrink by over 2-percent.
Countries are rolling out enormous fiscal and monetary policy packages to cushion the coronavirus fallout.
The U.S. has approved a rescue package worth two-trillion dollars, which amounts to roughly 10-percent of the country's GDP.
"The total package here comes to roughly six trillion dollars: two trillion direct assistance, roughly four trillion in Federal Reserve lending power. Again, it would be the largest mainstream financial package in history of the United States."
To facilitate domestic consumption, Japan is considering issuing cash and gift certificates to the public and subsidizing travel expenses.
It's a stimulus package worth 270-billion U.S. dollars, with greater government spending than in 2008 during the global financial crisis.
Eurozone countries are looking at extending their bailout fund's precautionary credit lines worth some 2-percent of a country's GDP to countries in need.
Oh Jung-hee, Arirang News.