The International Monetary Fund says the coronavirus remains a source of “tremendous uncertainty” to the global economy, but said it can still imagine a scenario where the negative effects are only temporary.
IMF Chief Economist Gita Gopinath told Yahoo Finance on Monday that while the coronavirus could still become a global pandemic, she is not currently forecasting sustained negative impacts from the outbreak.
“This week and next week is going to be very crucial for determining how successful the world has been containing the virus and implications of that,” Gopinath told Yahoo Finance in an exclusive interview. “There is a scenario where all the hit takes place in the first quarter and by April, like a v-shape, China is back to normal.”
‘The epidemiology surrounding it is still unclear’
Gopinath said the IMF is paying attention to other corners of the world as authorities in Iran, South Korea, and Italy report their own cases of coronavirus. She said her main concern is if the virus spreads to countries that may not have robust infrastructures for health care.
Gopinath said economies relying on Chinese tourists or Chinese imports could see a hit from the virus.
Broadly, she said the probability of coronavirus petering out is “certainly not guaranteed” at this point.
“The epidemiology surrounding it is still unclear,” Gopinath said. “The question is: whether this will move outside of China and become a pandemic. And so we can think of really downside, dire scenarios where things could go bad.”
As of Sunday, the World Health Organization’s official count on the number of coronavirus cases reported globally was 78,811. Over 2,400 people have died as a result of the disease, also called COVID-19.
The WHO said Monday that it does not consider the virus a “pandemic,” clarifying that the organization no longer uses the word as a classification for outbreaks.
“For the moment, we are not witnessing the uncontained global spread of this coronavirus,” said WHO Director-General Tedros Adhanom Ghebreyesus.
The IMF had previously said in January that it expected the global economy to grow by 3.3% in 2020, citing concerns with negative developments in emerging markets like India. At the time, the coronavirus was only in the beginning stages of its outbreak, and the IMF made no mention of it in its report.
IMF Managing Director Kristalina Georgieva had said over the weekend that the coronavirus could shave global growth by 0.1%.
The IMF will release an updated read on its global growth forecast in April.
Brian Cheung is a reporter covering the banking industry and the intersection of finance and policy for Yahoo Finance. You can follow him on Twitter @bcheungz.