A woman walked into a small hardware store in Columbia, SC on Friday night and asked the manager if they had any masks.
The manager said no. She replied that the website shows the store still has a couple of them. Yes, but they have since been sold, he says.
Asked about the conversation, he said the woman was about the 100th person that week to stop at the True Value hardware store looking for masks because of the coronavirus.
The conversation in the hardware store is an indicator of the spread of concerns about the Covid-19 virus. On Monday, the epidemic killed more than 3,000, including the first two over the weekend in the United States. Confirmed cases have exceeded 89,700 in 65 countries, including 88 in the United States.
CUNA Mutual Group Chief Economist Steven Rick said on Friday that interrupting the spread of the Covid-19 virus would likely cause credit union lending growth to slow to 5% this year, down compared to its January estimate of 6%. Either estimate represents a further slowdown in credit union lending after growing 6.6% to $ 1.14 trillion in 2019 and 8.9% in 2018.
“If it’s a massive pandemic, we might even see something lower than that,” Rick said. “There is so much uncertainty right now about how quickly this is spreading across the world.”
A report released on Monday by the Organization for Economic Co-operation and Development said the virus is expected to slow global economic growth to 2.4 percent in 2020, 0.5 percentage points lower than it had estimated in November. This assumes that the spread of the virus is limited and that its impact starts to wear off this spring.
“New cases of the virus in other countries are also assumed to be sporadic and contained, but if not, global growth will be considerably lower,” the OECD said in a report from 18. pages titled “Coronavirus: the global economy in danger.
The report said: “A longer lasting and more intense coronavirus outbreak – spreading widely in the Asia-Pacific region, Europe and North America – would significantly weaken the outlook. In this case, global growth could drop to 1.5% in 2020, half the rate projected before the virus outbreak. “
If global GDP grows only 1.5% this year, it “could push several economies into recession, including Japan and the euro zone.”
On February 25, NAFCU chief economist Curt Long lowered his estimate of U.S. GDP growth to 1.7%, down from his previous forecast of 2% in response to virus risks. Both of these figures are down from US GDP growth of 2.3% in 2019 and 2.9% in 2018.
Rick, of the CUNA Mutual Group in Madison, Wisconsin, said if the current spread of the virus turns into a pandemic, it could reduce U.S. GDP growth this year to 0.5% to 1.
In the milder OECD scenario, the inflation-adjusted gross domestic product of the US economy will slow from 2.3% in 2019 to 1.9% in 2020, an estimate of just 0.1 percentage point less than his forecast for November.
The OECD report did not provide an estimate for the United States in the most severe scenario, but its downward revision for North America this year goes from a range of -0.1 at -0.2 point in the mild scenario to a decrease of 1.5 points in the worst case scenario.
“Initially, the negative impact is concentrated in China, but the effects in the rest of Asia, Europe and North America gradually accumulate until 2020” in the most difficult scenario , according to the report.
“Most of the decline in GDP comes from the direct effects of reduced demand, but the impact of increased uncertainty is gradually accumulating,” he said. “World trade is significantly weaker, declining by around 3.75% in 2020, affecting exports in all economies.”