February 27, 2020 / 11:52 AM / a month ago

BofA cuts global growth forecast to lowest since financial crisis

LONDON (Reuters) - Coronavirus worries saw BofA cut its world growth forecast on Thursday to the lowest level since the peak of the global financial crisis in 2009.

“We have cut our 2020 global growth forecast to 2.8% (from 3.2%). This would be the lowest reading since 2009,” the bank’s economists wrote in a note, adding it would also be the first time since the crisis that it was expected to be under 3%.

They added that extended disruptions in China were likely to hurt global supply chains. Weak tourist flows will be another headwind for Asia. And limited outbreaks, similar to the one in Italy, are possible in many countries, leading to more quarantines and weighing on confidence.

“Therefore, we have cut our forecasts across the board,” they said. China is now expected to grow 5.2% from 5.6% previously. “We project just 2.2% growth outside China, also the lowest rate since 2009.”

Reporting by Marc Jones; Editing by Tom Arnold

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