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Moody’s says Turkish economy will shrink 1.4 pct in 2020 due to coronavirus effect

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US-based credit rating agency Moody’s has said the Turkish economy will shrink by 1.4 percent in 2020 and grow 0.8 percent next year, slashing its growth forecasts for all countries due to the novel coronavirus outbreak.

The world economy is expected to contract by 0.5 percent in 2020 due to the negative impact of the coronavirus, the agency announced late on Wednesday, according to the Albawaba news website.

Moody’s November 2019 forecast for the year was 2.6 percent, it said in a press release.

The financial services company, however, said it expected the global economy to grow by 3.2 percent in 2021.

It said that although central banks had responded quickly, the “financial sector’s volatility has exploded to levels last seen during the 2008 global financial stress.”

“The financial market stress is a reflection of deep anxiety and uncertainty around the real economic costs that households and businesses around the world will bear,” the statement said, adding that job losses will increase globally in the next few months.

“The longer these conditions persist, the more they would potentially feed self-sustaining recessionary dynamics, and expose existing vulnerabilities in the real economy and financial sectors,” it added.

Moody’s forecast for advanced economies is a negative 2 percent in 2020 while a positive 1.9 percent for emerging countries. It expects a decline of 2.2 percent for the eurozone.

After first appearing in Wuhan, China, last December, the infection has spread to at least 175 countries and territories.

The number of confirmed cases worldwide has surpassed 500,000 while the death toll is over 22,300, according to the latest figures.

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