COVID-19 to permanently hit global economy: Moody’s

New Delhi: The rapid spread of coronavirus in the last two weeks causing widespread business closures and unprecedented restrictions on social interactions will result in a permanent hit to global economic activity this year, Moody’s Investors Service has said in latest global macroeconomic report

It said that a sharp contraction of the global economy, at least in the second quarter, appears imminent and uncertainty will remain for at least several months as to how long it will take to contain the spread of the virus and how businesses and households will cope with the resulting financial losses

The Moody’s report said that the short-term economic costs of Covid-19 outbreak are likely to be steep, the world over while the long-term consequences will depend not only on the depth and duration of the hit to economic output, but on whether it will cause lasting damage to balance sheets of households and businesses.

Though the damage from the virus outbreak would be widespread, the Moody’s Investors Service said that strong and targeted policy measures could limit the economic damage to household finances and the balance sheets of the non-financial sector.

Policy measures with the objective of preventing job losses and business failures will likely yield superior long-term outcomes than traditional stimulus measures, it said. (IANS)

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