ROME: A key UN trade organisation is warning of looming recession in the world economy as countries respond to the novel coronavirus outbreak.

Richard Kozul-Wright of the UN Conference on Trade and Development (UNCTAD) predicts a global hit to the world economy of between $1 trillion and $2tr this year, and cautions it could be worse.

Even before oil markets plunged on Monday, Kozul-Wright said countries whose economies are largely dependent on production of commodities will face pressures as an economic slowdown reduces demand for their products.

Kozul-Wright said the European Union, which faced poor economic prospects at the end of 2019, was almost certain to tumble into recession this year, pointing especially to pressures in Germany and Italy.

He was speaking at a release of a new UNCTAD report examining the possible impact of the COVID-19 outbreak and forecasting that annual global growth will fall below 2.5 per cent this year.

Germany, France Put Brave Front

German Chancellor Angela Merkel has warned against thinking that measures to slow the spread of the new coronavirus are in vain, insisting that they are buying valuable time.

Merkel spoke at a German-Greek business forum in Berlin on Monday as stock shares plunged in Europe and elsewhere amid increasing disruption caused by the worldwide virus outbreak. Germany reported 1,112 confirmed cases as of Monday morning but the country hasn’t yet reported any infection-related deaths.

The German leader said that while the virus will spread further in Germany, that in no way means that everything we are doing in every country on this Earth, including in Germany, to break chains of infections with quarantine measures was in any way in vain.

She stressed: It was and is absolutely not in vain, and it was and is not irrelevant what we do.

Merkel continued: The most effective thing against the virus is the time factor, to avoid doctors and hospitals being overburdened.

We are working for valuable time, time in which scientists can research medicines and a vaccine and in which governments can help stock up on protective equipment, she said.

French President Emmanuel Macron and first lady Brigitte Macron took a walk on Paris Champs-Elysees avenue to send a message of confidence to the French economy amid the coronavirus crisis.

The French president walked hand-in-hand with his wife on the street known for luxury shopping and stylish living but maintained a one-meter security distance from others during the walk on Monday.

Macron said: I’m shaking hands using my heart as he waved at people.

Macron asked some shopkeepers and a taxi driver whether they’ve seen business decline and promised to support companies.

He said: It’s important to have a response that corresponds to the risk as analysed by scientists.

Macron added that the measures France adopts to stem the outbreak must be proportionate and he added: We cannot shutdown the country but we need to protect the most fragile people.

Published in Dawn, March 10th, 2020