Chinese coronavirus will slow the world economy until July

the World economy because of the coronavirus will not grow until June, predicts “VTB Capital”. Stock markets are optimistic, the stock price does not drop much. Investors believe that the Central banks of large countries will provide cheap loans to the markets in case of problems.

In the case of a ubiquitous coronavirus outside of China the situation may deteriorate. In this case, the fed may dramatically reduce the rate to 1-1. 25 percent. Now the rate is maintained at 1.5–1.75%.

the World’s Central banks, starting with the most recent crisis of 2008, cut rates for filling up economies with cheap loans. So regulators want to spur GDP growth. From the fed there is more headroom to cut rates in the Eurozone is not helping – the bet on “zero” and the growth of the European GDP fell to the lowest in seven years.

According to Moody’s, China’s GDP could decline by 0.6 percentage points to 5.2 percent. In China because of quarantine restrictions disrupted logistics, are suspended production.