Economic Activity Could Fall by 25% in Developed Nations
March 30, 2020
The coronavirus, and the efforts to stop it, could reduce economic activity in the U.S. and other developed countries by a full quarter, according to the Organization for Economic Cooperation and Development.
The organization, which includes 20 of the world’s leading economies, delivered a report on the economic impact of the quarantine and social distancing measures implemented across the globe. They estimate that the activities most directly impacted by the shutdowns, like restaurants and car sales, account for between 30 and 40 percent of the total economic output in the developed nations. The reduction in these activities could see total economic output fall by 20 to 25 percent.
The report also estimates that if such measures were kept in place for three months, the total annual economic output for the developed world would be 6 percent lower. This means that the U.S., which was previously estimated to have 2 percent GDP growth in 2020, could instead see a 4 percent reduction for the year.