The outlook for the global economy has come under increasing pressure from the rapid spread of the corona virus. In China and the neighbouring Asian region, operational processes are still disrupted, putting global supply chains under pressure. The outlook for the European economy and the United States has also become much gloomier. It is not only the export-dependent countries that are threatened with burdens. More and more countries are increasingly restricting public life, which is weighing on the domestic economy. We have therefore significantly lowered our growth forecasts. Global economic growth is likely to be around one percentage point lower and will be just under two percent in 2020.
In China, the economy is likely to have contracted in the first quarter of 2020 compared with the previous quarter – a first in the last 30 years. Although the number of infections is now declining significantly and many of the rigorous precautionary measures have been eased, there is still a long way to go. But the country is still far from normal. Negative repercussions are threatened by the global spread of the epidemic and the downturn in the world economy. A dynamic recovery in the second quarter is certainly not to be expected. We expect growth of only 4.5 percent this year.
In the USA, economic growth is likely to lose momentum as early as the first quarter. With the further increase in the number of infections, the buying mood of consumers is likely to collapse soon. Slowing effects on exports due to the slower global economy and weaker investment activity should result in a decline in economic output in the second quarter, the first negative quarter since the beginning of 2014. The rapid drop in oil prices is also posing challenges for the US oil industry. We are lowering our growth forecast significantly and expect growth of only one percent this year.
For European industry, the corona crisis comes at an inopportune time, as it is only just recovering gradually from a period of weakness. Now the industry is threatened by supply-side bottlenecks due to a lack of preliminary products and production downtime caused by illness. In addition, the transport, hotel and catering industries are likely to record significant sales losses. Cancellations of major events and travel cancellations are weighing on the tourism sector. And with Easter approaching, a tourism and economic heavyweight is in danger. With its high infection rates throughout Europe, Italy is the epicentre of the European corona crisis. The country is now largely at a standstill. In addition, the dampening effects along the value chains across the EMU borders are slowing down. For the year 2020, we anticipate a decline in gross domestic product of 0.1 percent across EMU. The growth rates in Q1 and Q2 will be noticeably negative.